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Climate Activist Shareholders

Investors in Costco are mad as hell about the company being a laggard on climate change, and they’re not going to take it anymore.

That was the message the retail giant’s shareholders just sent, when 70 percent of them voted for the company to set a strategy for eliminating carbon emissions from its value chain by 2050. According to investor advocacy group Ceres, it was the first time for such a net-zero proposal to pass at any company.

Whilst shareholder resolutions in the US aren’t legally binding, companies that don’t abide by them risk losing control of their boards and the financial support of institutional investors, making them a powerful tool to alter corporate climate behavior. The vote at Costco augers what is likely to be a historic year for climate-focused activist shareholders, who have long lingered on the sidelines of companies’ annual general meetings, but are now gaining support for their proposals, and racking up wins.

Dozens of climate-related shareholder resolutions are on the table at oil majors, banks, tech companies, and others, to be voted on over the next few months. Most are brought by activist groups that hold a relatively small number of shares and must convince bigger investors to get on board. But some large asset managers (such as Blackrock) are also threatening to vote against companies’ board members and auditing firms if they don’t demonstrate progress on climate. Afterall, money talks!

“Investors one by one are realizing that what’s in the best interest of an oil major, for example, is not necessarily in the best interest of their entire portfolio,” said Mark van Baal, founder of Dutch activist shareholder group Follow This, which is behind emissions resolutions this year at nine oil majors. “That’s really a shifting narrative, and what we try to convince investors of.”

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