GSAM to vote against companies not disclosing GHG data

Firm announces new proxy voting policy

Goldman Sachs Asset Management is getting ahead of emissions-reporting requirements proposed by the SEC, on Thursday announcing it will vote to oust public company directors who lag on climate disclosures.

Under the changes to its proxy voting policy, the asset manager “will vote against audit committees (or other committees that are responsible for overseeing ESG risk) at companies globally that do not disclose material greenhouse gas emissions (GHG) data and have made insufficient progress in doing so.”

Goldman Sachs Asset Management global head of stewardship Catherine Winner told ESG Clarity the firm has been engaging with 271 companies around lack of GHG emissions data.

“The climate transition is a big area of concern for our clients and our investment teams so we want to ensure companies are disclosing their appropriate GHG emissions, their climate transition plans and how they hold themselves accountable,” she said.

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The change follows a step by the firm in December to increase board diversity. At the time, it indicated that beginning this month it “will expect companies in the S&P 500 and FTSE 100 to have at least one diverse director from an underrepresented ethnic minority group on their board.” Additionally, public boards globally are now expected to have at least two women, with an exemption for those with 10 or fewer board members, the company stated. In the US in particular it will vote against all members on boards that do not have women, it said.

“There’s a lot of work to do in the US on gender in the boardroom,” Winner said. “There are around 135 companies with all-male boards so we’ll be voting against the entire board there.”

Last year, the firm voted against more than 7,600 public company directors, representing 15% of those it voted on, according to the statement it issued Thursday.

The new climate-disclosure policy “is aligned with the SEC’s new proposal on climate risk disclosures” and will encourage companies to report data ahead of schedule, the firm stated. Its policy was designed in part around recommendations put out by the Task Force on Climate-Related Financial Disclosures.

Further, the company is planning to vote against companies that violate UN Global Compact principles but do not work to fix them, and it has “built out its approach to specific types of shareholder proposals” such as for racial equity, it stated.