Goldman Sachs Asset Management (GSAM) announced today a series of updates to its proxy voting policy, raising expectations for companies on climate reporting and in other sustainability-related performance areas.

Under the revised policy, Goldman announced that it will begin voting against audit committees, or other committees responsible for overseeing ESG risk at companies globally that fail to disclose material greenhouse gas emissions data.

The new climate data policy follows the release this week by the U.S. Securities and Exchange Commission (SEC) of new proposed rules for mandatory climate disclosures from public companies, including data on Scope 1 and 2 emissions by larger companies beginning with FY2023, and for smaller companies for FY2024, and on Scope 3 emissions if material or included in a company’s stated goals.

According to Goldman, its new proxy voting policy aims to help drive progress on emissions reporting ahead of the SEC deadlines, and for companies globally not covered by the proposed rules.

Goldman also stated that it will vote against companies that violate the UN Global Compact (UNGC) principles, and have not made significant changes to address the violations. The UNGC is a consortium of companies and organizations across the globe committed to aligning their strategies and operations with a series of ten principles on human rights, labor, environment, and anti-corruption, and to take strategic action to advance broader societal goals such as the 17 UN SDGs.

The updates mark the second set of ESG-focused proxy policy revisions for the $2.5 trillion asset manager. In December, Goldman updated its board diversity expectations for companies, announcing that it will vote against companies in the S&P 500 and FTSE 100 that do not have at least one diverse director from an underrepresented ethnic minority group, and public companies with 10 or more board members that do not have at least two women on the board.

Catherine Winner, Global Head of Stewardship at Goldman Sachs Asset Management, said:

“Proxy voting is a critical tool for engaging with companies on sustainability issues that are material to their financial performance. These changes will help us push companies to improve on those issues for the benefit of our clients and of shareholders more generally. We believe it’s critical for asset managers to be active owners of assets, and robust stewardship is central to our active investment philosophy.”

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