Organization: Bank of New York Mellon Corporation

Year: 2018

Description:

Whereas: Bank of New York Mellon (“Bank”) is a respected global leader in the financial services industry and rightly proud of its good governance, positive social and environmental programs and services to clients.

For example, in 2015 the Bank announced it would make available a “wide range of environmental, social and governance (ESG) data and insight to its depository bank clients”, the first bank to offer this service to issuers, noting the growing momentum from investors and companies to carefully consider the financial implications of ESG factors.

Confirming the Bank’s concern about climate change, in a public statement before the Paris Climate conference, Bank of New York Mellon President Karen Peetz stated “Taking strategic action to mitigate climate change is good for our clients, our investors, our people and our world.”

In one of many statements by global leaders highlighting climate risk, Mark Carney, Governor of the Bank of England stated “the combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longer-term prosperity.” BlackRock has also published an important paper on climate risk highlighting the challenges and risks for investors.

Bank of New York Mellon and its subsidiaries invest money on behalf of their clients and as part of their fiduciary duty are responsible for recommending votes or voting proxies in their portfolios. Proxy voting is one of the principal ways investors can communicate with companies.

The Bank’s Proxy Voting and Governance Committee provides guidance on voting proxies to the Bank’s investment advisor subsidiaries, rightly focusing on their clients’ economic interests in giving voting advice and actively recommends votes in favor of numerous governance reforms.

Yet the proxy voting recommendations of the committee demonstrates consistent recommendations against virtually all environmental and social resolutions, even when there is a strong business and economic case supporting the resolution.

Many shareholder resolutions on the topic of climate change simply ask for more disclosure or goals to reduce greenhouse gas. In contrast funds managed by investment firms such as Goldman Sachs, Wells Fargo, Morgan Stanley, and AllianceBernstein supported the majority of these resolutions and investors like State Street and TIAA voted in favor of a significant percentage of resolutions on climate.

These incongruities pose a reputational risk to the company. Given the severe impacts of climate change, including significant risks to investors and the economy, there is also risk to BNY Mellon and its clients if its proxy voting practices ignore climate change.

We believe Bank of New York Mellon should review and report on its policies and proxy voting record on climate change taking into account scientific consensus and the bank’s fiduciary duty to clients.

Resolved: Shareowners request that the Board of Directors issue a report on proxy voting and climate change to shareholders prepared at reasonable cost and omitting proprietary information.