Proxy Voting for the Earth System: Institutional Shareholder Governance of Global Tipping Elements

29 Pages Posted: 26 Mar 2022

See all articles by Ami Golland

Ami Golland

Stockholm University - Stockholm Resilience Center

Victor Galaz

Stockholm University - The Beijer Institute of Ecological Economics

Gustav Engstrom

The Beijer Institute of Ecological Economics

Jan Fichtner

University of Amsterdam / CORPNET

Abstract

Global “tipping elements” such as large forest biomes are critical for climate stability, and are key resource pools for extractive industries – typically, forestry and farming. In recent years the largest global asset managers have begun promoting sustainability policies among their portfolio companies, while evidence suggests that financial institutions can influence change in forest biomes through shareholdings. We explore this potential by studying proxy voting by large financial institutions in corporate annual general meetings (AGM), according to institution type and emphasising the largest asset managers, the “Big Three”. We analyse over 180,000 votes relating to ecological sustainability, across 597 AGMs in 263 companies, from 2010-2019. Results indicate that pension and sovereign wealth funds lead in supporting these resolutions, particularly in deforestation categories (around 75%). Asset managers support these resolutions less (approximately 25% of votes), while the “Big Three” average lower (between 6-20%). We recommend further research into asset managers, “universal owners” and proxy advisors in particular, as they are dominant, closely related actors in global finance, and therefore crucial for responsible Earth system governance.

Keywords: Sustainable development, telecoupled systems, institutional shareholders, proxy voting, corporate environmental governance, global tipping elements

Suggested Citation

Golland, Ami and Galaz, Victor and Engstrom, Gustav and Fichtner, Jan, Proxy Voting for the Earth System: Institutional Shareholder Governance of Global Tipping Elements. Available at SSRN: https://ssrn.com/abstract=4067103 or http://dx.doi.org/10.2139/ssrn.4067103

Ami Golland (Contact Author)

Stockholm University - Stockholm Resilience Center ( email )

Kräftriket 2B
Stockholm, SE-114 19
Sweden

Victor Galaz

Stockholm University - The Beijer Institute of Ecological Economics ( email )

Stockholm
Sweden

Gustav Engstrom

The Beijer Institute of Ecological Economics ( email )

Stockholm, SE-104 05
Sweden

Jan Fichtner

University of Amsterdam / CORPNET ( email )

Nieuwe Achtergracht 166
Amsterdam, 1018 WV
Netherlands

HOME PAGE: http://www.jfichtner.net

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