• Active Ownership Report

Climate stewardship: How systemic engagement can strengthen portfolio resilience

The evolving nature of engagement on climate change to include systemic factors leads the Robeco Active Ownership’s team latest report.

Authors

    Head of Active Ownership

Summary

  • Climate change stewardship embraces geopolitical and regulatory changes
  • Mixed results on engagement over ocean health and tax transparency
  • Playing without the referee brings problems for US shareholder resolutions

Engagement on ocean health and tax transparency, and an update on a backwards step for shareholder proposals in the US, are also featured in the report of activities in the third quarter.

It begins with an insight into how engagement on climate change is itself transitioning from a focus on corporate commitments to decarbonization and disclosure of emissions data toward a wider ‘systemic stewardship’ that brings in geopolitical, regulatory and energy market developments. Robeco is launching a Europe-focused systemic engagement program in the second half of 2026.

“Engagement is moving from a bilateral investor/investee dialogue to something much wider,” says Cristina Cedillo, Cluster Lead Environmental Engagement. By combining corporate engagement with engagements with governments and policymakers, we aim to address both the company-specific and systemic factors that influence long-term climate outcomes.

“Methane emission reduction is one example of how this works in practice. We highlight a case study on engagement with a Brazilian energy company, where we were engaging both with them and with the Brazilian government. We firmly believe that resilient climate outcomes require coordinated action from companies, policymakers and investors. This supports portfolio resilience while contributing to the broader transition to a lower-carbon economy.”

Rising tides and expectations

Ocean health is becoming a material investment and business risk as marine ecosystems face growing pressure from climate change, pollution and overexploitation of natural resources. Robeco’s Ocean Health engagement program focuses on seafood, shipping and cruise companies.

“Oceans cover 70% of the Earth’s surface, and their health are no longer a niche biodiversity issue – more than two-thirds of companies depend on marine-related ecosystem services,” says Laura Bosch Ferreté, Senior Engagement Specialist. “Our Ocean Health engagement has highlighted significant differences in how sectors are responding to these challenges.”

“While some firms are improving their ocean-related and general biodiversity governance, transparency and operational resilience, progress remains uneven. As the engagement program moves into a more advanced phase, we’ll focus on measurable goals and greater corporate alignment with the Taskforce for Nature-related Financial Disclosures (TNFD), among other issues.”

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Taking stock of tax transparency

Tax transparency is an important issue for investors, particularly as regulators increase scrutiny of companies who shift profits from one jurisdiction to another to avoid higher taxes. Yet, most companies remain reluctant to provide voluntary disclosures, especially country-by-country reporting.

“No-one wants to pay more tax, and some companies have significantly reduced effective tax rates below expected statutory rates, typically by moving profits from one country to another,” says Michiel van Esch, Head of Active Ownership. “While lower taxes might leave more profits for shareholder distributions, shareholders should also be mindful of the uncertainty around effective tax rates resulting from increased scrutiny by tax authorities, and the changes in sentiment by governments and society.”

“Robeco has therefore been engaging to encourage greater tax transparency at companies, particularly in openly reporting the discrepancy between where revenue is generated, and where the tax is paid. But progress has been limited, and meaningful improvements in tax transparency will likely depend on regulatory requirements rather than voluntary action.”

US shareholder proposals: playing without the referee

Finally, we report on how a recent decision by the SEC to take a back seat for giving guidance on the US shareholder proposal process has led to a surge in litigation, with shareholders increasingly turning to courts to challenge exclusions.

“This has had the effect of removing the referee, leaving the shareholder players to resort to the courts for answers instead,” says Manuel Sobral, Engagement Specialist. “It risks fueling the wider ‘anti-ESG’ backlash by making it easier for companies to remove resolutions that seek to address sustainability issues.”

“We viewed this withdrawal with concern, as we need clear and consistent standards to protect investors’ abilities to table proposals. We do have some means of protest though, such as by voting against the reappointment of directors if we think they are intentionally blocking legitimate resolutions.”

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