Investment group in the UK advocates for climate-related shareholder votes at top 100 corporations in the FTSE

Investor Coalition Urges FTSE 100 Companies to Put Climate Transition Plans to Vote

A coalition of investors, managing approximately £1.6 trillion in assets, has called on the chairs of 76 FTSE 100 companies to submit their climate transition plans for shareholder voting. The coalition, which includes the Local Authority Pension Fund Forum (LAPFF) and the CCLA, emphasises the importance of companies including material climate-related impacts in their financial statements and allowing shareholders to make informed investment decisions.

Historically, energy firms have been the focus of shareholder pressure on transition plans, with some companies like Shell already putting their plans to a vote. However, this time around, energy firms are absent from the list as they have been the focus of an earlier campaign.

The targeted companies for the coalition's call include a mix of industries, such as pharmaceutical firms like AstraZeneca, defense contractor BAE Systems, Intercontinental Hotels, financial services companies such as HSBC, Lloyds, Phoenix, Prudential, and asset management firms like Schroders.

The coalition is particularly concerned about the considerable climate-related risks that major companies face and their implications for long-term company success. They argue that allowing shareholders to vote on climate transition plans would enable them to make more informed investment and stewardship decisions.

So far, the approach by LAPFF and CCLA has received twenty-one responses. Two firms have indicated that they will hold a vote at the 2024 AGM, and one at its 2025 AGM.

AGMs provide shareholders with the opportunity to support a board's approach to key strategic decisions and hold them to account for their management of material risks and opportunities. Companies should outline their climate strategies within these transition plans, giving shareholders a say in how their investments are being managed in relation to climate change.

In 2023, LAPFF and CCLA led an investor group writing to 35 of the highest emitting companies in the FTSE 350 index, including those in the oil and gas, utilities, and mining sectors. The coalition is pushing for a broader expansion of shareholder rights on climate issues.

One notable example is Shell, whose updated Energy Transition Strategy was put to a vote earlier this year, receiving the backing of a clear majority of shareholders, despite criticism from climate campaigners for not outlining emission reductions within this decade.

Councillor Doug McMurdo, chair of the LAPFF, encourages boards to provide investors with the chance to support their climate transition strategies or raise specific concerns. He emphasises that this is an opportunity for companies to demonstrate their commitment to addressing climate change and for investors to make more informed decisions about their investments.