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The Chronicle: central banks recommend climate action - shareholder resolutions focus on lobbying

Welcome to another edition of the Chronicle. 

This edition covers central banks and supervisors; calls to reform the IEA WEO scenarios; shareholder resolutions relating to climate risk and lobbying, and a survey of UK asset managers on their intentions and actions around Paris-alignment.
Central banks’ network publishes first comprehensive report
The Network for Greening the Financial System (NGFS), the organisation of central banks and financial supervisors which has grown to include 36 members, published its First Comprehensive Report in mid-April, following the preliminary report of October last year. They came up with a series of recommendations for central banks, supervisors, companies and policymakers:
1. Integrating climate-related risks into financial stability monitoring and micro-supervision;
2. Integrating sustainability factors into own-portfolio management;
3. Bridging data gaps [sharing and making data publicly available];
4. Building awareness and intellectual capacity and encouraging technical assistance and knowledge sharing.
Mark Carney, Francois Villeroy de Galhau, and Frank Elderson wrote an accompanying op-ed in the Guardian which repeats the report’s mention of a possible “climate Minsky moment”. The FT’s Gillian Tett wrote about the significance of many of the world’s central banks writing such a report.
An important feature of the recommendations is that they make several specific calls on policymakers and others; in fact there are a 5th and 6th recommendation that are not for central banks or supervisors at all. “We need to take action and we cannot and will not do this alone,” Frank Elderson, chair of the group and board member of Dutch central bank DNB, says in the report’s introduction.
Next steps: The NGFS plans to operationalise its work and has several specific outputs planne, including a handbook on climate and environmental risk management for central banks and financial supervisors; voluntary guidelines on scenario-based risk analysis; and best practices for central banks’ own portfolios. It also announced an intention to collaborate with central banks and supervisors who are not NGFS members; academia; NGOs; and industry.
Investors, experts, businesses and NGOs ask IEA to reform its influential scenarios
In early April, more than 60 signatories, including investors and investor groups representing more than $33tn under management, CEOs of big businesses, IPCC lead coordinating authors, and representatives of vulnerable countries, signed a letter to the executive director of the International Energy, Agency, asking that the agency revise its World Energy Outlook scenarios, which are published every year in November. The letter asks the IEA take steps to ensure the central New Policies Scenario is no longer interpreted as the guidance scenario, and that it is understood to put the world on track for 2.7 - 3.3C of warming. It also asks that the Sustainable Development Scenario is made the central scenario, that it contains an emissions trajectory consistent with 1.5C; and that it takes a precautionary approach to negative emissions technologies.
While some aspects of this are highly technical, others are more accessible, such as the IEA’s role in ensuring that it’s WEO scenarios are not interpreted as predicting the future (the IEA says they are not predictions, but a quick search will verify that it is very widely reported as such).
The IEA in its response declined to adopt any of the recommendations. News coverage in the FT and detailed analysis in Bloomberg.
Meanwhile, NGO Banktrack reports that Dutch bank ING has agreed to ask the Dutch government to request that the IEA create a 1.5C scenario.
Exxon resolution pits investors against directors; corporate lobbying activities under scrutiny in US AGMs
SEC rules bite on climate-related resolutions: A large number of climate-related shareholder resolutions have been filed this with US companies this season - ISS put the number at 75 - although, as Alliance Advisors notes in the Harvard Law School Forum, climate resolutions have also been disproportionately affected by new SEC guidance around exclusions based on ordinary business and economic relevance.
Exxon is the most notable of these exclusions: the oil company’s management successfully sought several climate-related shareholder resolutions be omitted by the SEC; most notably the resolution calling for a disclosure of GHG reduction targets, filed by Climate Action 100+ members Church of England and NY State Pension Fund. In response, the filers decided to back existing proposals calling for all Exxon investors to: vote against company directors; call for an independent chair, a climate change board committee and disclosure of direct and indirect lobbying activities and expenditure. Large asset managers Blackrock, Vanguard and State Street all voted in favour of resolutions filed by the same investors in 2017 (albeit on disclosure rather than targets); the same investors also withheld votes for two Exxon directors (one, in the case of State Street).
Back in Europe, RWE and BASF both committed to review their climate change-related lobbying after engagement from CA100+ (Dow Jones), with Equinor making a similar commitment earlier in the month (Dow Jones, City A.M, FT).
Rio Tinto meanwhile undertook to publicly declare when its stance of climate change didn’t align with that of industry lobby groups, reaching agreement with the Australasian Centre for Corporate Responsibility prior to a resolution being filed (story in the Guardian; company statement).
Amazon staff climate resolution receives support from ISS and Glass Lewis
A shareholder resolution we believe worth watching this AGM season. The resolution, filed by employees, asks Amazon to prepare a report on how it is planning for climate disruption, and how it plans to reduce its dependence on fossil fuels. It is linked to a letter signed by more than 7,000 employees (Wired, NYT). The filers reported last week that ISS and Glass Lewis had both recommended voting for the resolution.

UKSIF issues annual asset manager survey on climate risk attitudes
A survey of 39 fund managers shows the sector’s attitude to climate risk and investment in fossil fuel companies is moving, but too slowly. The survey focuses on the engagement between fund managers and integrated oil companies (IOCs), showing that there is progress in the area, as only two out of 39 fund managers see IOCs that do not respond to climate change-related risk within 10 years as attractive investments (FT, Bloomberg and the Times).


The Chronicle is written by Kate Mackenzie and Denise Puca; you can contact us on

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