CoE blasts proxy-voting advisers for not supporting BHP resolution

The Church of England (CoE) has raised concerns over proxy voting advisers ISS and Glass Lewis’ decision to not recommend support to the pension board’s co-filed shareholder resolution against BHP.

As reporting in our sister title, European Pensions, In September 2019, the CoE along with the Netherlands’s MP Pension and ACTIAM, and Australia’s Vision Super, Grok Ventures and the Australasian Centre for Corporate Responsibility, filed a resolution calling on the company to suspend its membership to industry associations whose lobbying activities are inconsistent with the goals of the Paris Climate Agreement.

BHP’s funding of pro-fossil fuels lobbying has been a subject of increasing frustration for investors, who are concerned about further delays to the implementation of Paris-aligned policy. The resolution is set to be heard at BHP’s upcoming London AGM on Thursday 17 October, as well as its Sydney AGM, on Thursday 7 November 2019.

However, in a statement from the CoE pensions board head of ethics and engagement, Adam Matthews, said the decision by the proxy voting advisors ISS and Glass Lewis not to recommend support for the co-filed shareholder resolution raises serious questions about how investors can receive advice that enables them to meet their fiduciary duties to navigate the financial risks posed by climate change.

"Corporate funding of lobbying, fuelled with shareholder funds, is continuing at pace. In BHP’s case, changes that were promised in 2017 have not been delivered: namely that trade bodies should cease lobbying where its members are not aligned (this was the third principle of BHP’s 2017 Industry Review). Not one industry association has done so. Instead sophisticated, sustained and impactful negative lobbying remains evident.

"All investors are under growing scrutiny on the issue of climate change and how they exercise their proxy voting….Our fear is that continued inertia in the proxy voting system will ultimately prevent the objectives of key engagement interventions such as CA100+ being achieved,” he said.

Therefore, he has called on the Principles for Responsible Investment (PRI) to convene a high-level meeting of climate aware asset owners with the heads of the proxy voting providers to discuss a fit for purpose approach to climate change voting.

“It is hard to argue the current approach is aligned to the Goals of the Paris Agreement and a below 2 degrees of warming world,” he concluded.

ISS declined to comment and Glass Lewis has been contacted for a response.

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