CCLA Investment Management, Sarasin & Partners, Premier Miton, Nordea AM and Charles Stanley are among the 18 investors that have signed the letter.
The letter focuses on companies that emit high amounts of greenhouse gases and are within sectors considered to face “heightened climate risks”, the actions of which are “essential” to the accelerated measures required to meet the Paris goals, and where the risks investors face are “substantial”.
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Investors have for several years called on companies to provide such votes to enhance transparency and accountability given the growth of climate-related financial risks.
While some companies have responded positively, the letter noted such resolutions during 2023 were “far from standard practice”, including among high-emitting companies.
The letter urged those firms who have not provided a climate transition plan to vote: “Having such a vote will enable shareholders in the first instance to express their view on transition plans through a specific resolution rather than immediately voting against the chair or another board member.”
Natasha Landell-Mills, partner at Sarasin & Partners, one of the letter’s signatories, said AGMs have always been a “key moment for shareholders to hold boards accountable” and for boards to build shareholder backing for important strategic shifts.
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“For high-carbon companies seeking to pivot their strategies towards net-zero, shareholder support will be vital,” she said.
Landell-Mills added it is “far better to seek shareholder input and thereby shore up investor support for the transition, rather than provoke potentially destabilising dissent by denying shareholders a say”.
The intervention by investors comes against the backdrop of increasing focus from governments and regulators around climate transition planning.
In the UK, for example, an emerging recommendation from the government-backed Transition Plan Taskforce is for companies to produce transition plans every three years.
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Meanwhile in France, a proposed new law would require listed companies to put their transition plans to an advisory vote every three years, with an annual vote on the implementation of the strategy.
Tessa Younger, stewardship lead for the environment at CCLA, said: “We see a vote on transition plans or transition plan reporting as a mechanism for shareholders to assess company commitments, provide support for associated capital spend and ensure debate on expectations for greater action where needed.
“Such accountability is not just about individual companies, it underscores the urgent need for systemic change across industries and economies.”
