Nest has updated its voting policy to make clear it will vote against the board chair where a company has materially scaled back its climate strategy without adequate explanation.
The update sets out more clearly how Nest evaluates significant changes to climate-related targets, investment plans or transition timelines, and reinforces its expectation that companies maintain credible, transparent transition strategies.
It says that where adjustments are made, boards are expected to provide clear and evidence-based justification to shareholders.
This update comes after there has been significant disquiet from climate and activist groups about a number of large companies rolling back targets to reduce emissions. This has prompted shareholder protests at recent AGMs by BP for example.
By being explicit about its voting approach, Nest aims to support constructive dialogue with companies and provide greater certainty about how it will exercise its voting rights.
As a long-term investor, Nest says it sees clear governance and accountability as central to effective stewardship.
Nest director of responsible investment Diandra Soobiah says: “This policy update builds on our existing approach. We have engaged — and where necessary, voted against — companies that weaken their climate plans and do not provide adequate transparency to shareholders.
“We also expect companies to put material changes to their climate strategy or transition plan to a shareholder vote.
“We believe being explicit about how we evaluate these issues supports constructive dialogue with companies. Clearer guidance gives boards greater certainty about how we will approach our voting decisions.
“Our priority remains safeguarding our members’ long-term interests by encouraging responsible management of climate-related risks.”
