IIGCC has released its Net Zero Voting Guidance, which is designed to support asset owners and asset managers in developing their own net zero voting policies and practices.
Voting is a critical lever for investors to help support the decarbonisation of the real economy as part of their climate focused engagements and in line with fiduciary duties. The guidance aligns with the Net Zero Investment Framework and its recommendation for a voting policy consistent with assets in the portfolio achieving net zero emissions by 2050 or sooner.
Specifically, the guidance outlines three core principles underpinning the concept of net zero voting. The principles, which are accompanied by key considerations in the paper, are that voting:
Aligns with the investor’s own net zero objectives and targets
Communicates net zero expectations
Supports net zero stewardship, engagement and investment approaches
Asset owners and asset managers that have made individual commitments to net zero through the Net Zero Asset Managers (NZAM) and Paris Aligned Asset Owner (PAAO) initiatives are expected to develop stewardship strategies with a clear voting policy that is consistent with the objective for all assets in the portfolio to achieve net zero emissions by 2050 or sooner.
Likewise, under the Net Zero Investment Framework (NZIF), investors are expected to publish a voting policy that aligns with the net zero objectives of the framework. This guidance is designed to support asset owners and asset managers in their own development of net zero voting policies and practices, providing implementation guidance for those using stewardship to fulfil targets for listed equities under the NZIF.
Disclaimer: All communications and initiatives undertaken by IIGCC are designed solely to support investors in understanding risks and opportunities associated with climate change and take action to address them. Our work is conducted in accordance with all the relevant laws, including competition laws and acting in concert rules. IIGCC’s services to members do not include financial, legal or investment advice. The views expressed here do not necessarily represent those of all IIGCC members.