Canadian Institutional Investors Boost Their Climate-Related Shareholder Voting in 2024

Recent findings from the Investors for Paris Compliance (I4PC) indicate that Canadian institutional investors have markedly intensified their support for climate-related proposals in 2024. The study, which assessed voting records on shareholder climate resolutions, found that overall support for these proposals jumped from just over 50 percent in 2023 to nearly 65 percent this year. This upsurge places these investors more than 40 percentage points ahead of the average support observed among all investors. Notably, 12 out of 33 institutional money managers reviewed voted in favor of every climate resolution they encountered last year, a significant increase from the previous year’s figures.

I4PC, an advocacy group focused on ensuring that publicly traded companies in Canada remain accountable to their net-zero commitments aligned with the Paris Agreement, has designed its report to track how public-company engagements on climate issues are evolving beyond typical private negotiations. The report concentrated on Canadian institutional investors who are members of either Climate Action 100+ or Climate Engagement Canada, along with the influential Canada Pension Plan Investment Board (CPPIB) even though it is not a member of these groups.

The study reviewed 17 shareholder resolutions on climate from companies in the United States and Canada, and it was noted that most investors did not hold shares in every company on the list. Smaller money managers, typically known for their focus on social or ESG objectives, led the way in fully supporting climate proposals, with several firms voting 100 percent in favor. Among bank-affiliated money managers, a few also demonstrated significant increases in support compared to previous years, despite some institutions recording mixed or split votes due to differing stances among various managed funds.

On the public pension front, several major pension plans such as the Investment Management Corp. of Ontario, Canada Post Pension Plan, and the University Pension Plan maintained a perfect record by supporting every proposed measure. Other large pensions, while not fully unanimous, showed marked improvements in their voting behavior relative to 2023. In contrast, CPPIB recorded the lowest level of support among the public pensions, a result it attributes to its broader engagement strategy that includes discussions with boards and management teams rather than solely relying on proxy votes.

Additionally, I4PC noted that more than one-third of the investors reviewed specifically cited climate-related concerns when withholding votes for certain directors. This increasing tendency to condition votes based on climate performance is being perceived as a promising development in the evolution of corporate governance and shareholder activism.