The Institutional Investors Group on Climate Change (IIGCC) has published its net-zero voting guidance to support asset owners and managers in developing their net-zero voting policies and practices.

The guidance is based on the principle that investment strategies should prioritise engagement and stewardship as the primary mechanism to push for alignment with the goals of the Paris Agreement.

It highlighted voting as a “critical lever” for investors to help support the decarbonisation of the real economy as part of their climate-focused engagements and in line with fiduciary duties.

The IIGCC’s guidance is aligned with the Net Zero Investment Framework and its recommendation that voting policies should be consistent with assets in portfolios achieving net-zero carbon emissions by 2050.

Three ‘core principles’ were outlined in the guidance, which aim to underpin the concept of net-zero voting.

The principles are that voting aligns with the investor’s own net-zero objectives and targets; communicates net-zero expectations; and supports net-zero stewardship, engagement and investment approaches.

“There is no one size fits all approach to voting,” said IIGCC senior net-zero stewardship specialist, Laith Cahill.

“This paper embraces those differences, setting out three principles that will help investors develop bespoke voting policies and actions that effectively support and communicate their net-zero objectives and targets to companies.

“While voting is only one tool amongst many in the stewardship toolkit, utilising the full range of resolutions and options available to shareholders is important for investors seeking to secure real-world emissions reductions.”

---