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Governance Authority
Category: Proxy and Voting

Say-on-Climate

Also known as: Say on Climate
Simply put

Say-on-Climate is a practice in which a company puts its climate transition plan or strategy to a shareholder vote at its annual general meeting. This gives investors a formal opportunity to express approval or disapproval of how the company is addressing climate-related matters. Such votes are generally advisory and voluntary rather than legally required.

Formal definition

A Say-on-Climate is typically a management-sponsored resolution submitted by a company for a shareholder vote at its annual general meeting (AGM), through which shareholders express a view on the company's climate transition or net-zero plan. It functions as a governance and accountability mechanism that allows shareholders to signal support for, or opposition to, a company's climate strategy, and enables companies to demonstrate leadership on climate transition. The vote is generally advisory in nature; its use, structure, and frequency vary by jurisdiction, company, and market practice, and it is generally a voluntary practice rather than a uniform legal requirement. Adoption has fluctuated across proxy seasons, and outcomes are not always supportive, industry tracking has recorded instances of declining vote counts and the emergence of defeated resolutions.

Why it matters

Say-on-Climate matters because it introduces a formal channel through which shareholders can express a view on a company's climate transition or net-zero plan, rather than relying solely on informal engagement or divestment. For boards and management, a supportive vote can serve as a demonstration of leadership and accountability on climate transition, while a weak result or a defeated resolution can signal investor concern about the credibility or ambition of the underlying strategy. Because these votes are generally advisory, the result does not typically bind the company, but it nonetheless carries reputational and governance weight and can shape subsequent engagement between the board and its investors.

The practice is not static, and its trajectory is relevant to anyone tracking shareholder sentiment on climate matters. Industry tracking has recorded fluctuating adoption across proxy seasons, including a decline in the number of say-on-climate votes and the emergence of defeated resolutions, the first-ever say-on-climate defeat occurred as adoption patterns shifted. This underscores that placing a climate plan to a vote is not a guaranteed endorsement mechanism; outcomes depend on the quality of the plan and the expectations of the shareholder base.

For governance professionals, the key point is that Say-on-Climate remains a voluntary and predominantly advisory practice rather than a uniform legal requirement. Its use, structure, and frequency vary by jurisdiction, company, and market practice. Whether adopting such a vote is appropriate for a given entity is a matter of judgment that depends on regulatory context, investor expectations, and the maturity of the company's climate strategy.

Who it's relevant to

Boards of directors
The board provides oversight of corporate strategy, including how climate-related matters are addressed. Where a company chooses to hold a Say-on-Climate vote, the board is generally responsible for overseeing the climate transition plan being presented and for considering how to respond to shareholder sentiment, including a weak or defeated result. Because the vote is typically advisory, the board retains its oversight role and judgment rather than being bound by the outcome.
Management
Management typically develops the climate transition or net-zero plan and, in a management-sponsored Say-on-Climate resolution, is responsible for preparing and presenting that plan to shareholders at the AGM. The vote gives management an opportunity to demonstrate accountability and leadership on climate transition, while also exposing the plan to direct investor scrutiny.
Institutional investors and asset managers
Shareholders use Say-on-Climate votes as a governance and accountability tool to signal support for or opposition to a company's climate strategy. For investors, the vote provides a formal channel to express a view at the AGM, complementing other forms of engagement. Voting decisions and the interpretation of a company's plan remain matters for each investor's own analysis and stewardship approach.
Governance, corporate secretariat, and sustainability professionals
Those advising on AGM processes, shareholder engagement, and climate disclosure need to understand that Say-on-Climate is generally a voluntary and advisory practice whose use, structure, and frequency vary by jurisdiction and market. They may track adoption trends and outcomes across proxy seasons to inform how their organization approaches climate-related resolutions.

Inside Say-on-Climate

Advisory Shareholder Vote
Say-on-Climate typically refers to a shareholder vote on a company's climate transition plan or climate-related strategy and disclosures. In most cases these votes are advisory (non-binding) rather than legally determinative, meaning the board retains ultimate decision-making authority and is not obligated to alter its strategy based on the outcome.
Climate Transition Plan
The subject matter put to the vote is generally management's climate strategy, which may include emissions reduction targets, decarbonization pathways, capital allocation implications, and related governance arrangements. The specific contents vary by company and are not standardized across jurisdictions.
Voluntary or Management-Proposed Basis
In many markets, Say-on-Climate arrangements are put forward voluntarily by management or requested through shareholder proposals rather than mandated by statute or listing rules. Whether such a vote occurs, and its frequency, generally depends on the jurisdiction, the company's own choices, and applicable shareholder proposal mechanisms.
Board Accountability and Oversight Role
The board and its relevant committees typically retain oversight of climate strategy and disclosure, while management is generally responsible for developing and executing the transition plan. A Say-on-Climate vote is a mechanism for shareholder feedback and does not transfer operational responsibility for the plan away from management or oversight responsibility away from the board.
Disclosure Interaction
Say-on-Climate votes often draw on climate-related disclosures the company produces, which may be prepared with reference to voluntary reporting frameworks or, in some jurisdictions, mandatory disclosure requirements. The distinction between binding disclosure obligations and voluntary reporting depends on the jurisdiction, sector, and entity type.

Common questions

Answers to the questions practitioners most commonly ask about Say-on-Climate.

Is a say-on-climate vote legally required for public companies?
Generally, no. In most jurisdictions there is no broad statutory or listing-rule mandate requiring companies to put a climate transition plan to a shareholder vote. Say-on-climate has typically emerged as a voluntary practice, either offered by management or requested through shareholder proposals, rather than as a binding legal requirement. Whether any obligation exists depends on the specific jurisdiction, sector, exchange rules, and entity type, and this may evolve over time. Companies should confirm the current position with counsel, as this entry is educational and not legal advice.
Does an approving say-on-climate vote make the board's climate strategy binding or transfer accountability to shareholders?
No. Say-on-climate votes are typically advisory in nature, meaning the result generally does not legally bind the board or compel adoption of a particular course of action. Accountability for setting and overseeing climate-related strategy typically remains with the board, and responsibility for executing the plan sits with management. A shareholder vote does not shift oversight duties away from the board or operational responsibility away from management; it is generally a mechanism to gauge shareholder sentiment rather than to reallocate governance roles. The precise legal effect depends on the jurisdiction and the terms on which the vote is offered.
Should the say-on-climate vote be structured as a vote on the plan itself or on progress against it?
Practice generally varies, and the choice is a matter of board and management judgment. Some entities put the transition plan or strategy forward for an initial vote, while others hold periodic advisory votes on progress or implementation reports. Each approach has different implications for how shareholder feedback is interpreted and how frequently the vote recurs. There is no single mandated format under current frameworks, so the structure should be aligned with the company's disclosure practices, governance arrangements, and applicable local requirements. Confirm any format expectations against relevant listing rules and stewardship codes in your jurisdiction.
Which board committee typically oversees preparation for a say-on-climate vote?
This depends on how the board has allocated responsibilities, and practice varies by entity. Oversight of climate-related matters may sit with the full board, a dedicated sustainability or ESG committee, the risk committee, or the audit committee, depending on the company's committee structure and charters. Preparation of the underlying plan and supporting disclosures is typically a management responsibility, with the relevant committee providing oversight and the full board generally retaining ultimate accountability. Entities should ensure committee charters clearly document who owns which aspect to avoid gaps between oversight and operational duties.
How can assurance functions be involved in a say-on-climate process?
Involvement depends on the entity's assurance arrangements and should preserve the separation of roles across the lines of defense. Management (first line) typically owns the data, targets, and disclosures underlying the plan. Risk and compliance functions (second line) may support by assessing controls, consistency, and adherence to applicable requirements. Internal audit or external assurance providers may provide independent assurance over aspects of the reported information, subject to their remit and independence. Whether and what level of external assurance is obtained is generally a matter of judgment and any applicable requirements, and expectations differ by jurisdiction and framework.
How should a company respond to significant shareholder dissent on an advisory say-on-climate vote?
Because the vote is typically advisory, a high dissent level generally does not compel a specific action, but many governance codes and stewardship expectations encourage the board to consider and respond to meaningful shareholder feedback. A common practice is for the board to engage with shareholders to understand concerns and to communicate how that feedback has been considered. The appropriate response depends on the facts, the reasons for dissent, and the board's own judgment. Any expectation to publicly explain the response would depend on applicable codes, listing rules, or stewardship frameworks in the relevant jurisdiction.

Common misconceptions

A Say-on-Climate vote is legally binding and forces the company to implement or change its climate plan.
These votes are typically advisory in nature, meaning the board is generally not legally required to adopt shareholder preferences. The board retains decision-making authority, though a significant vote may create reputational and engagement pressure.
Say-on-Climate is a universal legal requirement that all listed companies must hold.
Whether a company holds such a vote generally depends on the jurisdiction, applicable listing rules, shareholder proposal mechanisms, and the company's own decisions. In many markets these votes are voluntary or arise from shareholder proposals rather than being universally mandated.
A Say-on-Climate vote shifts responsibility for climate risk from management or the board onto shareholders.
The vote is a feedback and accountability mechanism. Management generally remains responsible for developing and executing the transition plan, and the board generally retains oversight responsibility; a shareholder vote does not reassign these roles.

Best practices

Clarify at the outset whether a proposed Say-on-Climate vote is advisory or binding under the relevant jurisdiction and governing documents, and communicate that status transparently to shareholders.
Ensure the climate transition plan put to a vote is supported by clear disclosure, and distinguish which underlying disclosures are subject to binding requirements versus voluntary reporting frameworks in the applicable jurisdiction.
Define and document the respective roles of the board, relevant committees, and management in developing, overseeing, and executing the climate strategy before it is subject to a vote.
Establish a process for how the board will consider, respond to, and communicate its response to the vote outcome, particularly where advisory support is low.
Engage with shareholders and, where relevant, proxy advisors ahead of the vote to understand expectations and reduce the risk of misalignment on the plan's contents.
Confirm that any figures, targets, and framework references in voted materials are accurate and appropriately caveated, and treat the exercise as company- and jurisdiction-specific rather than assuming a universal standard applies.