By Saabira Chaudhuri 

Unilever PLC said it would become the first major company to voluntarily give shareholders a vote on its efforts to reduce carbon emissions, seeking greater engagement with investors on climate issues.

The owner of Dove soap and Ben & Jerry's ice cream said Monday it would seek approval from investors every three years on its plan to mitigate its carbon impact and the risks of climate change on its business. However, the vote would be only advisory and doesn't require Unilever to make changes.

Major investors say they are putting more emphasis on addressing the threats posed by climate change, with shareholder resolutions on the issue becoming more common. By proposing its own climate resolutions for shareholders to vote on -- which take into account the challenges and realities of achieving them -- Unilever is in the driving seat, said one big investor.

BlackRock Inc., one of Unilever's largest investors, said earlier this year that it would be increasingly likely to vote against management and boards if companies don't disclose climate-change risks and plans in line with key industry standards.

Climate Action 100+, a group of large investors including BlackRock that is pressuring companies to act on climate change, welcomed Unilever's announcement as meaningful.

"Despite only being an advisory vote, it will allow investors to provide a clear statement of intent to the company about the importance of sticking to its plans for a transition to net-zero emissions," said Piers Hugh Smith, the investor group's point person for Unilever.

A Unilever spokeswoman said investor interest in managing the transition to net zero was growing and that the company wanted to send a signal that it was serious about meeting these targets.

The consumer-goods giant is among the growing number of companies setting public targets for cutting carbon emissions over the next few years. London-based Unilever has promised to eliminate emissions from its own operations by 2030 and to do the same from sourcing to point of sale by 2039. It also plans to halve the footprint of its products in the next decade, which involves the more difficult process of cutting emissions from consumers using its products.

To achieve those goals, Unilever said it would need to rethink the raw materials it sources, use more renewable energy and eliminate deforestation from its supply chain, among other measures. The company said it would rely on carbon credits to balance residual emissions.

Nestle SA said earlier this month that it would invest the equivalent of about $3.6 billion over the next five years in cutting carbon emissions as the Nescafe coffee owner works toward hitting its own targets. Other consumer-goods giants such as Colgate-Palmolive Co., Procter & Gamble Co. and Kimberly Clark Corp. have made similar pledges.

Unilever said it would share more details about its climate strategy in the first quarter and plans to report on its annual progress in 2022.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

 

(END) Dow Jones Newswires

December 14, 2020 13:58 ET (18:58 GMT)

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