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Globalance supports Unilever's intention to seek shareholder approval for its climate action plan

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Summary

As part of its shareholder engagement program, Globalance met with Unilever on 25 February 2021 to discuss their climate strategy. To mark an extraordinary challenge we support Unilever's extraordinary step to seek shareholder approval on 5. May 2021 for its upcoming climate action plan. It is the first time a global company is doing so.

“We have a wide ranging and ambitious set of climate commitments – but we know they are only as good as our delivery against them. That’s why we will be sharing more detail with our shareholders who are increasingly wanting to understand more about our strategy and plans." Alan Jope, Unilever CEO

What is it about

In December 2020, the Unilever Board announced the intention to put its climate transition action plan before shareholders and seek a non-binding advisory vote on the company’s ambitious emissions reduction targets and the plans to achieve them. Read the full announcement here.

As part of its direct engagement with companies, whose shares it holds in its mandates, Globalance met with Unilever on 25 February 2021 to discuss their plans. Also, we discussed data, methodology and results of Unilever's climate warming potential, as reported on Globalance World.

Why is this important

Unlike other companies, Unilever has not faced shareholder resolutions calling for a say on climate vote. The pro-active stance by Unilever's management is a remarkable first. It believes that the economy-wide shift to net zero emissions will require a greater and deeper level of engagement between companies and their investors about their climate transition plans. In setting out their plan, they hope this increased level of transparency and accountability will strengthen the dialogue with their shareholders and encourage other companies to follow suit.

The Globalance View

Extraordinary times call for extraordinary action: To reflect climate change as a critical issue of its future-fitness is important for long-term shareholders. Although this corporate governance-precedent may not be appropriate for many less critical strategic issues, Globalance supports Unilever's intention in this case. Investors have become increasingly concerned about the financial risks of climate change in their portfolios, arguing that many companies are failing to fully outline the risks they face from global warming. Unilever has the power and track-record to make other companies follow suit. And, the company is at the heart of an important global value chain. In its climate action plan, it accepts that it will not be able to achieve its ambitious goals without its important stakeholders and partners delivering their share.

In December 2020, Nestle has announced the details of its own Net Zero-Roadmap. Globalance welcomes these strategic and ambitious commitments and the fact that the issue of climate change has finally become a routine aspect of competitiveness and long-term business success.

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