Press release: 26 October 2021

ClientEarth lawyers set out roadmap to file “breakthrough” resolutions on climate in Europe

Investors can lawfully file resolutions to drive corporate climate action in most European countries, according to world-first research by ClientEarth that analyses 13 national legal frameworks for climate shareholder engagement across the continent.

Supported by the Institutional Investors Group on Climate Change (IIGCC), ClientEarth’s report demystifies the legal labyrinth that has obstructed climate-related resolutions, and provides a roadmap to file proposals in several key jurisdictions.

Lawyers concluded that there was a legal avenue to file – or ‘requisition’ – climate resolutions in all but one of the frameworks analysed, with pathways in countries including France, Germany, Italy, Spain and the UK.

Recent high-profile activism at oil majors Chevron and Exxon, as well as megabanks Barclays and HSBC, has underlined the power of resolutions to drive change among big corporate polluters.

As investors settle strategies for next year’s Annual General Meeting season, ClientEarth’s research will be a vital resource to overcome the roadblocks hindering investor engagement with companies on crucial climate issues.

ClientEarth lawyer Paul Benson said: “Investors are waking up to the magnitude of climate risk and are increasingly using their powers as a force for good, to compel corporate climate action.

“But investor engagement on climate can get stuck, either becoming a siloed conversation between shareholders and Investor Relations teams, or bogged down in insubstantial corporate commitments.

“Resolutions can break through. With this guide, shareholders can now act with confidence and make full use of this tool as a potent driver of change at companies that have such a critical role in the net-zero transition.”

Although legal avenues exist for shareholder resolutions in the majority of jurisdictions analysed, some are easier to navigate than others.

The report found that in countries such as the UK, Ireland, Spain and Sweden, the position is relatively simple. Shareholders have an explicit right to instruct a company’s board and can use this power to ensure that climate risk is being properly managed.

In other countries, such as France, Germany and Austria, the position is more nuanced: investors must fall back on their reserved right to amend the company’s Articles of Association, and they must frame their ‘asks’ carefully.

The Netherlands is the only jurisdiction analysed where, unless the Board agrees to table a climate-related resolution, there are no clear legal avenues available to shareholders to seek to compel them to do so.

ClientEarth’s research answers critical questions often asked by investors when considering how to file resolutions in each of the 13 jurisdictions, and maps out the timings and costs, as well as specific rules, to help shareholders find a route through the legal fog.

Stephanie Pfeifer, Chief Executive at IIGCC, said: “For investor stewardship to play its part in delivering net-zero, it must be swift and bold. Resolutions are one of the key tools that investors have at their disposal to ensure the companies they are invested in take the necessary action to address climate risk, and plan for the transition to a low carbon economy.

“This report provides a critical new resource to overcome the barriers to use resolutions across Europe. We hope that it will allow a step change in the effectiveness of investor stewardship, allowing resolutions to be deployed when they are needed.”


Notes to editors:
  • The report analyses legal frameworks in 13 countries: Austria; Czech Republic; Finland; France; Germany; Ireland; Italy; Luxemburg; Netherlands; Spain; Sweden; Switzerland; and the United Kingdom.
About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.