Investors call for Say on Climate votes at 2023 AGMs

A group of investors has written to the chairs of UK-listed companies asking them to disclose their plans for transitioning to a low-carbon economy, and to give shareholders a specific “Say on Climate" vote at the next AGM. 

A similar request was circulated in advance of the 2022 AGM season, and the Local Authority Pension Fund Forum (LAPFF), as coordinator of these particular letters, claims that a substantive response was received by many companies putting a climate-related resolution to their shareholders in 2022. 

Our reviews of the market, however, show that such resolutions are still in the minority and generally confined to the energy and banking sectors. In addition, companies should bear in mind that not all investors support the need for such resolutions and would prefer that companies invest time and effort in developing their climate governance and reporting.

More information about the Say on Climate initiative, the resolutions produced as a result, and transition planning is set out below. 


From 2020, the Say on Climate initiative, supported by the Children's Investment Fund Foundation, has encouraged listed companies of all types to submit a climate transition action plan to an advisory vote by shareholders at the AGM. 

In January 2021, the Investor Forum also called on the UK government to consult on making climate resolutions at AGMs mandatory. It does not seem likely that any such obligation will be imposed.

Say on Climate resolutions 

Say on Climate resolutions can take different forms but they are usually resolutions to approve a climate transition strategy. In a few cases the resolutions have been more focused on approval of an outline strategy, coupled with a commitment by the company to present a detailed transition plan at a later date.

There is an important difference between the types of resolutions which have been put to shareholders, namely whether they are management-proposed or have been requisitioned by shareholders.

  • Management proposals: These are advisory and non-binding resolutions put forward by the company itself (often anticipating or responding to investor pressure) to gain shareholder reaction to a transition plan. The purpose of this may be to test the company's approach, respond to investor expectations and to avoid shareholder resolutions (see below). The proposal should make clear that the board retains responsibility for setting and implementing the company's strategy in this area. 
  • Shareholder requisitions: These are resolutions put forward by shareholders requiring certain actions to be taken by the company. They are generally defeated by a large majority, but even so they take time to deal with and require significant engagement with investors. 

Market practice

Say on Climate resolutions in the UK have mostly been put by corporates with significant climate impacts and by financial institutions. In 2022 there were 20 such resolutions (up from 10 in 2021). Of these, 17 resolutions were proposed by the board and all were passed, while three were requisitioned by shareholders (down from six in 2021) and none of these were passed.

Investor and proxy advisor guidance

Investors have mixed views on these votes and guidance is evolving. 

Transition planning

While transition planning is at an early stage, it is now developing quickly through the work of organisations including the UK Transition Plan Taskforce . In particular there is now an expectation for plans to cover scope 3 emissions and to include short, medium and long term targets, with a preference for these to be science based and for some level of assurance on performance. The government has flagged an intention to make disclosure of plans mandatory under the Sustainable Disclosure Regime, potentially within the next two years. 

As transition plans become more developed, they inevitably take longer to develop and test. Companies should also bear in mind that any targets, strategy or transition plan presented to shareholders or otherwise made public will become a source of obligations. The risk of “greenwashing" also needs to be considered.

Approach for companies

The approach companies may choose to take in this area will be driven by where the business is in terms of transition planning, and the level of concern the company is aware of, or anticipates, on the part of investors. 

More information

A copy of the LAPFF press release is available here.

For a summary of global trends in Say on Climate votes and shareholder activism, see page 11 of our ESG Outlook 2023

For recent commentary focussed on UK-listed companies, see our AGMs Update 2023 (page 5) and, for background, our AGMs Update 2022 (pages 8-10).