22 May 2026
5 min
The sustainability landscape continues to evolve, shaped by regulation, market practice and changing investor priorities. With this, expectations for asset owners, investment managers and companies are also changing. In our monthly sustainability blog, we aim to bring clarity by focusing on the developments we believe have the greatest relevance for investors.
BP suffered a shareholder revolt at its Annual General Meeting (AGM), with more than 50% of votes cast against management proposals to weaken climate disclosures and scrap in-person shareholder meetings. The proposals prompted opposition from proxy advisers ISS and Glass Lewis, despite both having recently reduced their support for sustainability resolutions in the United States.
Support for a shareholder resolution calling for better disclosure of oil and gas capital expenditure exceeded 25%, the highest ever for a management-opposed proposal at BP. Separately, around 18% of shareholders voted against the re-election of the board chair. Glass Lewis backed the request for better disclosure and recommended voting against the chair, while Institutional Shareholder Services (ISS) backed management in both cases.
BP’s AGM is a useful reminder that votes are not a formality and that shareholders can influence company behaviour when they use their voting rights deliberately and constructively. Asset owners should treat voting as a core part of their escalation toolkit, alongside engagement and collaborative actions.
Asset owners should review whether voting executed on their behalf genuinely reflects their investment beliefs. Where there is misalignment, asset owners might consider tightening expectations on delegated voting, using voting choice or pass-through options, or setting clear internal accountability for how contested votes get decided. Finally, scrutinising outcomes and understanding the reasons for decision making can help identify any material misalignment and serve as a catalyst for further dialogue.
A coalition of 23 US state attorneys general have written to ratings providers Fitch, Moody’s and S&P, arguing the agencies have violated federal and state laws through their incorporation of environmental, social and governance (ESG) factors into the credit ratings of companies. They say the agencies have downgraded fossil fuel companies, plus some fossil fuel-reliant states and municipalities, on the back of what they call “highly speculative” ESG predictions and transition goals. The letter claims these judgements reflect undisclosed conflicts of interest, pointing to public commitments to incorporate ESG into ratings (including via UN-backed initiatives) and to net zero pledges, alongside the sale of ESG-related products and advisory services.
In contrast, the PRI’s view (outlined in its Statement on ESG in credit ratings) is that ESG factors can affect borrowers’ cash flows and default risk. As such, ESG factors can be considered financially material and relevant to creditworthiness. The PRI stresses two guardrails: firstly that credit ratings should reflect exclusively an assessment of creditworthiness (not a separate “ESG score”) and secondly that credit ratings agencies must be allowed independence to decide what is material to their ratings.
Asset owners should engage with their asset managers to understand how they assess financially material ESG risks, rather than relying on labels or assumptions about what ratings agencies do. This can include how they use external ratings as part of investment research processes, how they challenge ratings assumptions, and how their internal research treats transition risk, physical risk and governance risks across issuers in a consistent way.
If you'd like to discuss these developments or explore how we can support you, please get in touch.
Important Information
This blog is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this blog refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.
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