More than two thirds (69%) of institutional investors globally believe companies should set and disclose targets for reducing Scope 3 greenhouse gas (GHG) emissions, according to proxy advisor ISS Governance. Responding to the firm’s annual global benchmark policy survey, 47% of investors said all firms should disclose Scope 3 emissions reduction targets, with a further 22% agreeing only for companies for which these are significant. Meanwhile, a total 61% of non-investor respondents said companies should not be required to set Scope 3 emission reduction targets. When asked about supporting climate-related shareholder proposals, 33% of investors stated they generally did not view such requests as “overly burdensome” and tended to support them if shortcomings were identified in the company’s current approach. A smaller share (15%) said they were less likely to support proposals where “the technology necessary to achieve full value-chain net zero goals is not yet cost-competitive”. According to Morningstar Sustainalytics, average support for ESG-focused shareholder resolutions in the US stabilised at 23% in the 2024 proxy season. A slight majority (52%) of investors in the ISS survey said a board’s adoption of a “short-term poison pill” to defend against an activist campaign was generally not acceptable, while two thirds of non-investors said it was acceptable. On executive pay, 43% of investors supported the continuation of ISS’ pay-for-performance policy at US companies, which views the predominance of time-based equity awards as a negative factor. ISS Governance is a unit of Deutsche Börse-owned ISS STOXX, a provider of data-centric research and technology solutions to institutional investors and other capital market participants.
