IIGCC publishes net zero voting guidance

January 18th, 2024

The Institutional Investors Group on Climate Change (IIGCC) has published guidance to support investors in developing their own net zero policies and practices.

The Net Zero Voting Guidelines are aligned 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.

It highlighted the importance of voting as a lever for investors to support decarbonisation and a crucial aspect of climate focused engagements.

The guidelines outlined three core principles: the voting must align with the investor’s own net zero objectives and targets, that it communicates net zero expectations and that it supports net zero stewardship, engagement and investment approaches.

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. The guidelines also provide implementation guidance for those using stewardship to fulfil targets for listed equities under the NZIF.

The IIGCC said that the guidelines are aimed towards 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.

Laith Cahill, IIGCC’s senior net zero stewardship specialist, said: “There is no one size fits all approach to voting. This paper embraces those differences, setting out three principles that will help investors develop bespoke voting policies and actions that effectively support and communicate their net zero objectives and targets to companies.

“While voting is only one tool amongst many in the stewardship toolkit, utilising the full range of resolutions and options available to shareholders is important for investors seeking to secure real world emissions reductions.”

Given Minerva's bespoke standard approach to proxy voting policies, Minerva fully endorses the view that 'there is no one size fits all to voting'. Minerva's research and voting framework is aligned with this new guidance from IIGCC, as well as other key governance guidance such as the OECD, ICGN, and the AMNT. Minerva also supports the PLSA in the ongoing development of their own Stewardship & Voting Guidelines.

Minerva has always been a strong advocate for enhanced company disclosure, sustainability reporting and asset owner engagement. Over the years, Minerva has introduced "Say on Climate" guidelines to support investors with their specific sustainability goals and also launched Minerva's "Say on Sustainability" research reports back in 2012.