Franklin Resources Gets No Relief for Climate Resolution

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By Michael Greene

Dec. 1 — Global investment firm Franklin Resources Inc. may not exclude from its proxy materials a shareholder resolution seeking more information about its climate change stance, the Securities and Exchange Commission staff concluded.

The proposal called on the company's board to issue a climate change report to shareholders assessing “any incongruities between the proxy voting practices of the company and its subsidiaries within the last year, and any of the company's policy positions regarding climate change.”

Lead filer Zevin Asset Management LLC said available information suggests that the company's proxy voting record is inconsistent with a “responsive approach to climate change.”


Attorney Sanford Lewis, who represented Zevin, told Bloomberg BNA Dec. 1 that the no-action response “ends some of the insularity” that mutual funds have had over their proxy voting practices, particularly with respect to climate-related proposals. A representative from Franklin Resources didn't immediately respond to a request for comment. Franklin Resources is a holding company that conducts business through its subsidiaries, including investment advisers known collectively as the Franklin Templeton Investment Advisers.

In its request for no-action relief, the company claimed that the proposal was excludable because it dealt with matters relating to FTI Advisers' ordinary business operations. The company also argued that it lacked authority to implement the proposal.

Significant Policy Issue 

In its Nov. 24 no-action letter, the Division of Corporation Finance didn't agree that the company may exclude the proposal under the “ordinary business exclusion” rule—1934 Securities Exchange Act Rule 14a-8(i)(7).

“In arriving at this position, we note that the proposal focuses on the significant policy issue of climate change,” the letter, signed by SEC Attorney-Adviser Jacqueline Kaufman, said.

To contact the reporter on this story: Michael Greene in Washington at

To contact the editor responsible for this story: Yin Wilczek at

The no-action correspondence is available at

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