Investor group from the UK advocates for climate-related resolutions at the top 100 listed corporations of the Financial Times Stock Exchange
In a significant move, a coalition of investors with approximately £1.6 trillion in assets under management has called on the chairs of 76 FTSE 100 companies to include material climate-related impacts in their financial statements.
The investor group, known as the Institutional Investors Group on Climate Change (IIGCC), is pushing for a broader expansion of shareholder rights on climate issues. They argue that allowing shareholders to vote on climate transition plans would enable them to make more informed investment and stewardship decisions.
Historically, energy firms have been the focus of shareholder pressure on transition plans. However, energy firms are absent from the current list as they have been the target of an earlier campaign. Notably, Shell, a notable energy firm, put its updated Energy Transition Strategy to a vote earlier this year, despite criticism from climate campaigners for not outlining emission reductions within this decade.
The coalition's letter argues that companies should outline their climate strategies within these transition plans. Companies such as pharmaceutical firms like AstraZeneca, BAE Systems, Intercontinental Hotels, financial services companies such as HSBC, Lloyds, Phoenix, Prudential, and asset management firms like Schroders have been targeted for the coalition's call.
Councillor Doug McMurdo, chair of the LAPFF, stated that AGMs provide shareholders with the opportunity to support a board's approach to key strategic decisions. Approximately a fifth of FTSE 100 companies have already provided investors with the opportunity to approve their climate plans. Five companies from the 2023 campaign had previously put their transition plans to a vote.
Two firms from the 2023 campaign intend to hold a vote at the 2024 AGM, and one intends to hold a vote at its 2025 AGM. The approach of LAPFF and CCLA in 2023 so far received twenty-one responses.
McMurdo also mentioned that shareholders can hold boards accountable for their management of material risks and opportunities. He encouraged boards to provide investors with the chance to support their climate transition strategies or raise specific concerns.
The coalition's call comes as the focus on climate change and its impact on businesses continues to grow. As companies navigate this complex issue, the need for transparency and accountability in their climate strategies becomes increasingly important. The IIGCC's initiative is a step towards ensuring that shareholders have a clear understanding of how companies are addressing climate change and the associated risks and opportunities.
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