As the season for annual general meetings (GA) approaches, the initiative of the Autorité des marchés financiers (AMF) owes nothing to chance. The “gendarme” of the Paris Stock Exchange invites listed companies to “strengthen their shareholder dialogue on their climate strategy”, by including the subject on the agenda of these meetings, to submit it to the debate with the shareholders.
At the same time, the AMF’s Climate and Sustainable Finance Commission (CCFD) detailed its proposals aimed at improving transparency in this area, judging ” essestial “ an evolution of the regulatory and legislative framework.
The real issue of the debate? The “say on climate”, i.e. a shareholder vote on the company’s strategy and objectives in terms of the climate and the reduction of greenhouse gas emissions, on the model of the “say on pay” concerning compensation leaders. This claim is made by many non-governmental organizations, but also by many private investors. With still limited effectiveness: in 2022, only ten French companies have submitted such a project to their GM.
The AMF commission recommends a vote on the company’s decarbonization plan at least every three years. In addition, it suggests accepting the examination by the AGM of resolutions relating to the climate tabled by shareholders and proposes that it be impossible in the future to reject such resolutions on the sole ground that they would be incompatible with the strategic prerogatives of the company. However, the subject is delicate: in 2022, TotalEnergies, which had drafted its own resolution, had refused to include on the agenda an alternative text submitted by eleven investors.
The CCFD also recommends modifying the procedures for appealing against shareholder resolutions and strengthening the powers of the AMF in this area. However, its role is merely advisory and the Authority has already made it known that it does not wish to be entrusted with new responsibilities.
These proposals were nevertheless immediately welcomed by the NGO Reclaim Finance, which calls on the legislator to include in the law the “say on climate” and to guarantee that the publications of companies are subject to rules avoiding “greenwashing”, to namely the fact of embellishing the efforts undertaken to fight against climate change.
A first step
On the side of investment professionals, Aela Cozic, associate director of Sustainable Investing at Fidelity, believes that “the “say on climate” does not necessarily have to apply to all companies”, because a systematic vote would require resources and expertise that not all investors have today. “The High Legal Committee of the Paris financial center has proposed, for example, that it be applied to the most carbon-emitting companies. That would probably make more sense.”she adds.
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