Canada’s railroads endorse climate proposals in rare support for shareholder activism

When shareholders of the country’s largest railroad companies hold their annual general meetings virtually this month, investors will vote on bold climate-change resolutions that could compel both Canadian National and Canadian Pacific to publicize their carbon footprints, and give shareholders a say in how they can improve them. The resolutions are an example of the kind of shareholder activism that boards and corporate executives typically make every attempt to snuff out. So far, though, CN and CP are supporting them.

The proposals stem from an ambitious campaign launched by billionaire U.K. hedge-fund manager Christopher Hohn. He wants every public company to eventually make it common practice to give shareholders a voice on climate change. The initiative—called Say on Climate—is billed as a simple and necessary way to curb companies’ emissions. CP has endorsed the shareholder proposal from Hohn’s firm, The Children’s Investment Fund Management (TCI), and CN is asking shareholders to vote in favour of a similar resolution from its own management. 

TCI is CP’s largest shareholder, with almost 8.4 per cent ownership, and the fourth-largest at CN, holding a 2.9 per cent stake in the company. As climate change quickly becomes a top concern for investors and shareholders, analysts believe Hohn—with a US$6.65-billion combined stake in CN and CP and a famed history of shareholder activism—will buck the anti-activist trend and clinch victory at Canada’s railroads.

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