Billionaire Chris Hohn forces first annual investor vote on climate policy
Spanish airport group Aena agrees to put its efforts to tackle global warming to annual meeting
Spanish airports operator Aena is set to become the first company in the world to give shareholders an annual vote on its effort to tackle climate change, buckling to pressure from billionaire UK hedge fund manager Chris Hohn.
Mr Hohn’s TCI Fund Management, one of Aena’s largest independent shareholders, has been at loggerheads with the airport operator for a year over its response to global warming.
On Thursday, Aena agreed to his demands, underlining the fierce pressure companies are under to respond to investor concerns about climate change.
Maurici Lucena Betriu, chairman and chief executive of Aena, said that following discussions with Mr Hohn, the airport group had developed an ambitious climate transition plan and was happy to give shareholders a yearly say on it.
“I am very convinced about the solidity of the plan and the ambition. I am also convinced it is a manageable plan,” he said “There will be no trade-off between climate protection and overall profitability.”
He added: “We are well aware of the growing importance of this issue [climate change] everywhere, but particularly in the air transport sector.”
Institutional investors are increasingly vocal about climate change, driven partly by fears that those businesses which are slow to react could be hard hit by the transition to a lower carbon economy.
Mr Hohn, who sits on Aena’s board and helps manage $28bn at TCI, said Aena’s company’s climate plan was excellent and welcomed the annual vote shareholders will have on it.
“This accountability mechanism is essential for ensuring that companies take the climate issue seriously and are both transparent and accountable to shareholders for their climate plans,” he told the Financial Times.
The vote is akin to the advisory so-called say on pay votes held at shareholder meetings in the UK and US.
Under its new plan, Aena, which oversees Madrid-Barajas and Palma de Mallorca airports, will generate all of its energy from renewable sources by 2026. Aena, which has been hit hard by the pandemic and slumped to a net loss of €171m for the first half of 2020, has also outlined other efforts to reduce its carbon emissions.
“Chris is not the easiest board member I have ever met, but I am very happy to work with him, because I think the combination is good news for the company and shareholders,” said Mr Lucena Betriu.
In recent years, investors have filed resolutions calling for companies to set out plans to transition to a lower carbon economy. But Mr Hohn said the next step was to ensure investors were given the opportunity to vote annually on how all businesses were responding to climate change.
Earlier this year, Mark Carney, the former Bank of England governor, said that a vote on climate plans would “embed the critical link between responsibility and accountability.”.
“As an increasing number of firms disclose their assessment of climate risks, investors should have the opportunity to opine on the quality of these disclosures and so called transition plans,” Mr Carney said.
Mr Hohn’s resolution will now go to a vote at the group’s annual meeting later this month, where it is expected to pass thanks to the Spanish state’s majority ownership and management’s backing.
Even before the board changed its stance, Institutional Shareholder Services, the world’s largest proxy adviser, had called on investors to back Mr Hohn’s proposal, arguing it would “improve Aena's transparency on its environmental actions” and that it was “not overly burdensome for the company”.