AllianceBernstein posted its updated "Proxy Voting and Governance Policy" for the 2023 proxy season. Courtesy of Proxy Analytics, noteworthy changes from 2022 include these new provisions on escalation strategies (p5) and say on climate (p18):
Escalation Strategies
Proxy voting and engagements work in conjunction to raise and escalate investor concerns to companies. However, we may encounter circumstances where continued voting against management or engagement dialogues are no longer productive or helpful in driving progress. In cases where we feel that the issuer’s behavior isn’t aligned with our clients’ best interests, we can escalate our voting and engagement by taking actions including, but not limited to, as outlined in AB Stewardship Statement. The materiality of the issue and the response of management will drive our approach.
Say on Climate is an advisory vote mechanism that seeks to obtain shareholder approval on the company’s existing climate risk management related efforts. We recognize both the benefits of having an opportunity to review the company’s climate program, but also the risks entailed in formally approving the plan. Accordingly, we are generally unsupportive of shareholder proposals that require management to establish a say on climate mechanism.
In assessing the climate risk management strategy of issuers, AllianceBernstein considers factors such as following, but not limited to:
Emissions Metrics and Targets
• Does the company have emissions metrics and targets in place for Scopes 1 and 2 emissions in alignment with the Paris Agreement?
Climate Risk Management
• Does the company perform scenario analysis that includes the use of a widely recognized, scientifically-based 1.5-degree scenario?
Governance
• Does the Board provide oversight on the issuer’s climate change strategy?
• Has the company incurred any recent material failures, or been involved in any controversies, related to managing climate-related risk?
Disclosure
• Does the company disclose its exposure to climate risk via the framework developed by the Taskforce on Climate-related Financial Disclosure?
While Say on Climate (“SOC”) vote offers us an additional opportunity to express our view of the company’s relevant risk management, AllianceBernstein’s engagement and fundamental research processes drive our integration of climate related risks and opportunities apart from the SOC mechanism.
The updated policy also includes subtle changes to the Environmental Proposals provision to reference potential biodiversity-related proposals, as well as to introduce the consideration of company-specific context (in addition to other factors) in determining how to vote on environmental proposals.
Access institutional investor voting policies and additional resources on our Institutional Investors page.
This post first appeared in the weekly Society Alert!