Investors urge 76 UK companies to hold climate strategy vote

September 11, 2024

A group of investors with $1.6 trillion assets under management have called on 76 FTSE 100 companies to present their climate transition plans for investor approval.

The Local Authority Pension Fund Forum (LAPFF), supported by investors, wrote to the chairs of companies that have not held a vote on their climate transition plans in the past three years to set out expectations ahead of next year’s AGM season.

The group said these companies were not adhering to best practices as around a fifth of FTSE 100 companies, excluding investment trusts, have already provided their investors with the opportunity approve their climate plans.

In addition, emerging guidance, including from the Transition Plan Taskforce, also recommends that company’s climate plans are produced and updated every three years.

It’s not only best practices that demand transition plans – investors also expect companies to present credible transition plans with Paris-aligned targets and detailed strategies for achieving those goals, according to the group.

The group urged companies to outline their climate strategies within these transition plans and include material climate-related impacts in their financial statements. This would enable shareholders to make informed investment and stewardship decisions.

They added that specific votes on such climate transition plans allow shareholders to express support for the plans and the associated capital expenditure requirements.

By holding a dedicated vote on the transition plan, the group said shareholders can clearly indicate their confidence in the plan, rather than having their input diluted among various resolutions on the ballot.

Doug McMurdo, chair of LAPFF, said: “Given the considerable climate-related risks that major companies face and the implications for long-term company success, we are encouraging boards to provide investors with the chance to support their climate transition strategies or raise specific concerns.”

Minerva’s blog focuses on the latest developments in ESG investing and stewardship. Minerva is a global provider of sustainable stewardship solutions with over 25 years of expertise. Minerva empowers investors by providing essential tools, including ESG research and data, enabling them to navigate the intricate landscape of stewardship and proxy voting, whilst ensuring their decisions are well-informed and aligned with sustainable principles.