Thought Leadership

Proxy Battles

11 May 2023

As the proxy season continues, we aim to hold companies accountable for their performance on key sustainability and governance issues. We provide an update on some of our recent votes and engagements during 2023.

Targeting lack of targets

As discussed in a previous blog, this year has seen the introduction of strengthened voting expectations – for example, companies with no emissions targets are likely to receive a vote against. With c. 90% of the world’s greenhouse emissions now covered by net zero targets (and c. 25% covered by carbon pricing), we believe the lack of targets may signal the oversight of a source of material risk and will likely oppose the board director responsible for the sustainability committee (or, in some cases, the chair or other directors) – this includes votes at DH Horton (the US’ largest homebuilder) and major infrastructure company Kinder Morgan

Conversely, where targets exist, we believe linking them to executive pay provides investors with a signal of the potential importance of such targets; we have cast an increasing number of votes against pay packages that we believe are misaligned with long-term value creation and the management of material risks.

Similarly, for investors to be able to appraise the progress made by companies (and the strength of their targets), adequate and transparent disclosures are essential. Alongside dozens of other investors, we have continued to support a campaign calling on companies to report their emissions via CDP, a platform that drives much of the climate data infrastructure in the market. Building on this campaign, we have begun in 2023 to vote against companies that fall short of our disclosure expectations¹.

Financing in the spotlight

Transparency remains in the spotlight during the proxy season, as a majority of investors (including Fulcrum) supported shareholder proposals calling on major bank Wells Fargo to report on the congruency between official company positions and the lobbying conducted (e.g. via third-party associations). We added our votes to the circa 30% of shareholders asking Bank of America and Wells to issue a report on their climate transition plan, providing investors with more details on their strategy to meet their sustainability financing targets.

On this topic, we were very pleased to see financial giant BNP Paribas respond to our joint investor letter (co-ordinated by NGO ShareAction) by pledging to halt new financing for oil and gas projects – our main engagement request; with a follow up meeting.  

Extractive exploits

High-carbon companies remain a priority for our engagements, in particular those extractive companies that we believed are positioned to make a meaningful impact on the transition. We pre-announced our support for a shareholder proposal calling for clarity on the climate alignment of mining powerhouse Glencore’s coal assets, noting our belief in the upside share price potential from a cleaner portfolio. We look forward to discussing this with the company in an upcoming meeting to discuss the bank’s revised approach. 

As co-leads in the Climate Action 100+ investor coalition, we have continued our engagements with BP, including multiple meetings with the company and board members. Whilst we have expressed publicly some reservations around the governance of the company’s revised emissions targets, we believe the company’s plans remain broadly compatible with the goals of the Paris Agreement². We have therefore opposed a shareholder proposal on this issue. Given that the company has pledged to reduce its own oil and gas production, we do not believe investors unilaterally forcing further targets on the amount of third-party products sold in BP’s petrol stations, for example, is appropriate at this stage. That said, we will continue to engage with the company around the speed and scale of its low-carbon investments, and the lifecycle and payback profile of its oil and gas production.

As the above examples illustrate, scrutiny of both asset managers’ and companies’ sustainability performance is increasing; so is the need for transparency and nuance, as not everything that is sustainability-related is also supportive of shareholder (or even stakeholder value). We invite our clients and interested parties to review our voting records – alongside rationales for contentious votes – which are publicly available here:

About the Author

  1. Specifically, lack of CDP or SASB disclosure.
  2. By 2030, median oil and gas demand is only 10% lower relative to 2019 across 1.5C scenarios with ‘no overshoot’. (Source: Table TS.2 in the IPCC AR6 WG III report) This is broadly compatible with BP’s 2030 production aims.


This content is provided for informational purposes and is directed at professional clients as defined in Directive 2011/61/EU (AIFMD) and Directive 2014/65/EU (MiFID II) Annex II Section I or Section II or an investor with an equivalent status as defined by your local jurisdiction.  Fulcrum Asset Management LLP (“Fulcrum”) does not produce independent Investment Research and any content disseminated is not prepared in accordance with legal requirements designed to promote the independence of investment research and as such should be deemed as marketing communications.  This document is also considered to be a minor non-monetary (‘MNMB’) benefit under Directive 2014/65/EU on Markets in Financial Instruments Directive (‘MiFID II’) which transposed into UK domestic law under the Financial Services and Markets Act 2000 (as amended). Fulcrum defines MNMBs as documentation relating to a financial instrument or an investment service which is generic in nature and may be simultaneously made available to any investment firm wishing to receive it or to the general public. The following information may have been disseminated in conferences, seminars and other training events on the benefits and features of a specific financial instrument or an investment service provided by Fulcrum.Any views and opinions expressed are for informational and/or similarly educational purposes only and are a reflection of the author’s best judgment, based upon information available at the time obtained from sources believed to be reliable and providing information in good faith, but no responsibility is accepted for any errors or omissions. Charts and graphs provided herein are for illustrative purposes only. The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Some of the statements may be forward-looking statements or statements of future expectations based on the currently available information. Accordingly, such statements are subject to risks and uncertainties. For example, factors such as the development of macroeconomic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. In no case whatsoever will Fulcrum be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages. Reproduction of this material in whole or in part is strictly prohibited without prior written permission of Fulcrum Copyright © Fulcrum Asset Management LLP 2024. All rights reserved.

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