Investors seek climate votes at high-risk firms

Investor associations have written to companies in high-risk sectors, encouraging them to provide climate transition plan votes for “enhanced transparency and accountability”.

The associations, including Local Authority Pension Fund Forum (LAPFF), CCLA Investment Management, Sarasin & Partners and Ethos Foundation, have requested the chairs of 35 FTSE 350 companies to set out their expectations for shareholder votes on climate transition plans ahead of the next year’s annual general meeting season.

The letter emphasised companies in sectors with increased climate risks, pivotal to hasten progress towards Paris goals and where investors encounter significant risks.

The letter, signed by 18 investors representing £1.8 trillion assets under management, further stated: “Having such a vote will enable shareholders in the first instance to express their view on transition plans through a specific resolution rather than immediately voting against the chair or another board member.” 

The move came amid increased regulatory focus on climate transition planning, they cited. For instance, in the UK, the Transition Plan Taskforce recommends companies create transition plans every three years, while in France, proposed legislation suggests a triennial advisory vote on transition plans and an annual vote on strategy implementation for listed firms.

Tessa Younger, stewardship lead – environment at CCLA, added: “We see a vote on transition plans as a mechanism for shareholders to assess company commitments, provide support for associated capital spend and ensure debate on expectations for greater action where needed.” 

© 2023 funds europe

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