TheCorporateCounsel.net

Yesterday, Ceres announced new guidance for investor engagement with companies on governance of climate risk. Ceres notes that investors and proxy advisors can use the 2022 Ceres Guidance for Engaging on Climate Risk Governance and Voting on Directors for engaging with portfolio companies on the risks and opportunities emerging in the transition to a net zero emissions economy and to inform their voting decisions on electing board directors. The reports states:

The Guidance provides details on topics that investors and proxy advisory firms may want to consider to inform their company engagements and decisions on whether to support the election of directors responsible for climate change risk oversight. The Guidance covers practices in governance, reporting, and lobbying around climate change-related risks and opportunities, i.e., the direction in which all U.S. public companies should be moving on their journeys to address the net zero transition. Depending on their respective internal practices, investors and proxy advisory firms may determine if voting against or making a recommendation to vote against directors is appropriate for companies that lack one or more of these practices. As climate risk oversight continues to evolve, Ceres expects to update this Guidance.

Ceres emphasizes that disclosing climate-related risk governance is called for in the Task Force on Climate-related Financial Disclosures recommendations, and that the 2021 TCFD Status Report found that the these disclosures remain among the least implemented of the TCFD recommendations.  

– Dave Lynn