Britain's LGIM votes against fewer companies for climate failures
14/06/2022 24:01
By Juliette Portala
June 14 (Reuters) - Legal & General Investment Management
said on Tuesday it had voted against chairs at 80 companies this
year for failing to meet its minimum climate change standards,
down 35% from last year after it found more businesses had laid
out decarbonisation ambitions.
Firms in the oil and gas, banking and mining sectors and
real estate investment trusts were among those Britain's biggest
asset manager voted against most heavily, LGIM said after
publishing its latest annual Climate Impact Pledge report, which
covers around 1,000 companies.
LGIM said the fall in the numbers of chairs it had voted
against was evidence that engagement with laggards was working
and that there was greater momentum to address climate risks.
However, while more companies had published climate
commitments, it stressed that detailed net-zero transitions
plans to back up targets continued to be lacking.
"Companies that aren't taking sufficient action, we will
vote against the board chairs and their re-election across all
of the assets LGIM has voting rights on," Michael Marks, LGIM's
Head of Responsible Investment Integration, told Reuters.
As part of its climate engagement campaign, which covers a
small part of its overall assets, LGIM assesses companies on
issues like emissions targets, board oversight of climate risks
and the quantity of future earnings at risk in a low-carbon
transition.
The British fund house manages 1.42 trillion pounds ($1.73
trillion) but potential exclusions are applied to around 87
billion pounds of assets.
Despite more companies meeting minimum standards in 2022,
LGIM said 12 companies remained on its exclusion list and that
it had divested from two businesses - China Resources Cement
1313.HK and Invitation Homes INVH.N - for failing to respond
satisfactorily to engagement efforts.
"We can't force companies to actually do anything but we can
keep that pressure up and we do so with the weight of all of our
investment capital behind us," Marks added.
LGIM reinstated Japan Post Holdings 6178.T after it made
improvements including disclosure of scope 3 emissions - those
generated by customers - and published net-zero targets.
"We don't believe divestment is the answer. It doesn't
change the real-world outcome ... The public statement is one of
those things that really makes a difference," Marks said.
($1 = 0.8213 pounds)
(Reporting by Juliette Portala, editing by Tommy Reggiori
Wilkes, William Maclean)
((juliette.portala@tr.com ; +48 587 696 607))