The extraordinary rise of ‘say on climate’ resolutions at this year’s AGMs should be a wake-up call for all boards to ensure they have a robust climate change strategy.

The concept is based loosely on the ‘say on pay’ phenomenon that emerged in the UK in the early 2000s, based on public and shareholder dissatisfaction with what was seen as excessive executive pay. Over the following decade this led to a range of regulatory requirements in different jurisdictions, all in some way requiring boards to put their companies’ executive remuneration arrangements to a shareholder vote.

Say on climate proposes that companies report their annual emissions, publish their plan to manage the transition to net zero, and put that plan to a vote at their AGM. The idea is moving at an unprecedented pace, nothing like the leisurely decade that it took for say on pay to become accepted.

From its first instance at Spanish airport infrastructure company Aena in October 2020, global giants such as Unilever, Shell, Rio Tinto and Glencore have committed to supporting similar resolutions. In less than six months the idea has gained widespread support across investor and NGO groups, and calls for legislative action have already begun. What’s more, it’s likely that this is the thin end of the wedge, and other sustainability issues such as human rights, equality and biodiversity will soon make their way onto the AGM agenda.


Vanessa Richards is a corporate communications and governance consultant in Australia

The idea of shareholders having a say on a company’s climate policies is moving at an unprecedented pace

Outside the comfort zone

This poses some very real practical challenges for many organisations. Leadership teams are usually oriented towards ensuring a depth of experience on more traditional performance measures, primarily financial and operational. Leaders are also not able to rely on the same organisational support for their decision-making – sustainability strategies, policies, controls and metrics are almost always less mature.

Entrenched attitudes to sustainability issues are also reflected in the unspoken hierarchies within the leadership. Around the executive table, it would be a rare event to see the head of environment override the CFO. And while it’s common for a risk committee agenda to allow hours to discuss an accounting policy change, how often would they even get to hear of a change in human resources strategy?

So the rapidly emerging shareholder scrutiny of sustainability performance may well be uncomfortable for boards and executive teams. They are being asked to commit to achieving very different types of goals, well outside the familiar realms of EBITDA and total shareholder returns. But this is not a challenge that can be shelved. Markets, regulators and civil society are increasingly joining hands to demand transparency. The careers of this generation of corporate leaders and the futures of the organisations they lead are now firmly at stake.