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Shareholder Dialogue and Say on Climate

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The environment and climate strategy is the subject of increasing expectations from shareholders and has become a major issue during general meetings of listed companies, in particular by Say in the climate.

the Say in the climate It consists of submitting a decision on the environmental policy of a listed company to a vote of its shareholders at its general meeting. This decision may come either from the issuer voluntarily submitting it for a vote at the general meeting, or from shareholders requesting that their climate resolution be included in the agenda of the general meeting. The number of these decisions, which did not exist in France before 2020, continues to grow in the face of the growing awareness of the climate emergency. The shareholder dialogue is gradually adapting to this topic, which is not yet subject to any regulations, except for obligations in terms of reports from my brother.

Decisions made by governing bodies

More and more listed companies have taken up the topic Say in the climate By proposing, on the initiative of the board of directors or the supervisory board, a resolution aimed at presenting their environmental policy for a vote at the general meeting in order to promote the operation undertaken or coming from the company.

After many legal discussions about the hierarchy of the issuer’s legal bodies and the distribution of their powers, it now seems certain that a vote on a decision Say in the climate Proposed by the Board of Directors at a general meeting can only be advisory. In this regard, the Higher Legal Commission of the Paris Financial Center in its report on climate decisions “ Say in the climate In December 2022 this advisory vote ” It does not contradict any legal rule, in particular the principle of hierarchy of legal entities “.

subject matter of decisions Say in the climate It differs for different exporters and reveals at this stage the lack of market practices on this subject. According to the Arab Monetary Fund, these decisions relate to ” regarding strategy or policy [la] Society in terms of the environment, particularly its impact on climate. This could be, for example, an energy transition plan, the measures a company is taking to reduce carbon emissions »[1]. Sometimes they only target the principle of preparing a climate transition plan or the ambition and/or environmental goals of the source.

in practice, Say in the climatearound which the shareholder dialogue takes place at the general meeting, above all makes it possible to determine the level of support or rejection through the discussions and votes cast during the general meeting.

Decisions initiated by shareholders

in absence Say in the climate Existing or diseased, contributors sometimes suggest their own climate resolutions. The boards of directors did not always accept the inclusion in the agenda of such decisions at the initiative of shareholders, considering that they ” The General Assembly is involved in the competence of the Board of Directors »[2].

The Board of Directors may agree to include in the agenda of the General Meeting a climate resolution proposed by the shareholders only if it is of an advisory nature.[3]and decisions Say in the climate from the Board of Directors.

In the event of disagreement about adding this item to the agenda, the Mars Funders Foundation (AMF) indicated in its March 8, 2023 press release that it is not competent to assess the admissibility of a draft resolution proposed by the shareholder. Or the validity of the Board of Directors’ refusal. The AMF points out that these disputes fall under the jurisdiction of the Commercial Court.

In this regard, several working groups[4] Propose the adoption of legislative or regulatory amendments to facilitate and secure the submission of such decisions by shareholders.

Commitments reports from my brother

Along with developing practice Say in the climatea reports They are put in place, to enable shareholders to get better information.

Listed companies that exceed certain thresholds (balance sheet or turnover and number of employees) are already subject to the obligation to publish, in their management report, a declaration of non-financial financial performance including a detailed presentation of their environmental and climate policy.

In addition, from the entry into force in 2025 of Corporate sustainability reporting guidelines (CSRD), this reports It will be supplemented and extended to all companies listed on a regulated market, which will have to communicate at “ The plans determined by the company, including implementation procedures and related financial and investment plans, to ensure that its business model and strategy are compatible with the transition to a sustainable economy, and limiting the global warming temperature to 1.5 degrees Celsius in accordance with the Paris Agreement […]The goal of climate neutrality by 2050 […] “.

As such, the Arab Monetary Fund called in its press release issued on March 8, 2023, ” Going forward, listed companies should take these new requirements into account as much as possible when developing their additional financial reporting and climate strategy. “.

There is no doubt that the upcoming 2023 General Meetings will shed new light on the evolution of the practice Say in the climate and the need to standardize them through specific recommendations or regulations.

[1] AMF 2021 Report on Corporate Governance and Executive Pay for Listed Companies.

[2] The AMF 2021 report mentioned above.

[3] December 2022 Report of the Higher Legal Commission of the Paris Financial Center mentioned above.

[4] The December 2022 proposals for the Responsible Investment Forum and the March 2023 publication of the recommendations of the AMF’s Climate and Sustainable Finance Committee (which it determines do not reflect the position of the Board or AMF departments).

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