Skip to content

9 August, 2022

Subscribe Advertise About Us
  • My Account
  • Register
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
    • Categoriess

      • View All
      • Board Moves
    • US boards diversity

      US boards slow diversity with poor retirement policies

      Only 6% of organisations have term limits for directors, and there is reluctance around mandatory...

    • ben & jerry's governance Ben & Jerry’s governance tested in court

      Unilever, owner of the ice cream brand, is in conflict with the governance legacy put...

    • carillion fine News round-up: this week in governance

      Audit firms' complaints about fines; Carillion directors' fines revealed; is it time to abolish the...

  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • ESG debate

      The ESG debate needs to be more nuanced

      The issues boards face are rarely straightforward, and ESG is no exception. It is time...

    • AI

      How to ensure governance of artificial intelligence (AI)

      An ISO standard issued this year gives guidance to boards on the governance implications of...

    • hybrid working

      Has hybridity killed teamwork?

      The time has come to check whether the benefits of teamwork are still outweighing the...

  • Comment
      • View all
    • global warming

      ESG is not a ‘distraction’

      We must not let ESG become a scapegoat for the systemic failure of our society...

    • Man with magnifying glass The 30-year itch: time to ditch the UK Corporate Governance Code

      Now that governance has come of age, businesses should be able to innovate within the...

    • notebook on boardroom table The UK needs a code of conduct for company directors

      A formal code of conduct for company directors would signal their willingness to apply high...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • Board members discussing ESG Stakeholder pressure increases urgency on ESG

      Experts say pressure to act on ESG is coming from regulators, investors and a new...

    • Empty boardroom Many executives ‘fail to understand the role and value of boards’

      A recent webinar on board effectiveness discussed the mix of competence and courage required from...

    • Businessman looking at stormy sky Disaster or disruption? Crisis management requires clear definitions

      Identifying and categorising crises, and developing a methodology to deal with them, can help boards...

  • Careers
      • View all
      • Selection
      • Board Moves
    • US boards diversity US boards slow diversity with poor retirement policies

      Only 6% of organisations have term limits for directors, and there is reluctance around mandatory...

    • News round-up: this week in governance

      Tory leadership contest; Grant Thornton fined; Norwegian insider dealing; virtual AGMs; US environmental disclosures; diversity...

    • A group of diverse job candidates Diversity business case arguments may deter job candidates

      Performance-based and fairness-based arguments confirm that social identities "are a lens through which contributions will...

  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Corporate & Advisory Services
    • Stakeholder Engagement: A Roadmap for UK Plc Boards

      This guide aims to provide directors and their colleagues with advice on how to ensure...

    • Board Duties in Ensuring Company Engagement with Affected Stakeholders

      This guidance note gives a brief overview of the role of corporate boards of directors...

    • C-Suite Barometer 2021

      At the end of 2021, Mazars surveyed over 1,000 executives around the world for its...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Selection
    • Board Expertise
    • finance
    • Technology
  • Magazine
      • View All
      • Sustainability Works
      • Tomorrow's Leaders
      • Renumeration Tightrope
      • Governance Ascendance
      • Sense In Sustainability
      • Invisible Enemies

LGIM backs calls for ‘say on climate’ shareholder votes

by Gavin Hinks on April 7, 2021

Legal and General Investment Management (LGIM) wants companies to put their climate policies to a vote for investors.

Group of raised hands on green background

Image: Arosoft/Shutterstock

Pressure for UK companies to face shareholder votes on corporate climate policies —a “say on climate”— increased this week with one of the UK’s biggest investors adding their voice to calls.

Legal and General Investment Management (LGIM) has revealed it wants companies to put their plans to cut carbon emissions to shareholder votes for approval. LGIM says it will vote against plans that fall short of aligning companies with “net zero”, and also against boards.

Sacha Sadan, LGIM’s director of investment stewardship, says companies should see business benefits from harmonising their short, medium and long-term plans with net zero. He wants plans “clearly articulated” and for boards to be “accountable for their quality and implementation”.

“Achieving results at scale requires a collaborative approach across all stakeholders,” says Sadan. “Say on climate provides us with a complementary opportunity to send a consistent message to companies as a collective body of shareholders. Additionally, we applaud the concept of leveraging open source coalitions to drive climate accountability.”

LGIM’s intervention is the latest stage in efforts to reform the way shareholders approach climate change at investee companies. The drive for a “say on climate” began with Sir Chris Hohn of The Children’s Investment Fund (TCI). The campaign was launched in partnership with a number of other groups. A statement on the campaign’s website says that “ad hoc” voting against individual directors has failed to produce results and that “sustained shareholder pressure” is needed.

“Disclosure alone cannot drive the change we need to see from businesses to address climate change. The Say on Climate initiative combines disclosure with an AGM shareholder vote.”

‘Increased transparency’

The campaign celebrated in October last year when when Aena, the Spanish airports operator, agreed to host a vote following a year of discussion with TCI.

Other companies to have adopted the move include consumer goods giant Unilever, which announced in December that it would host a vote at its AGM in May this year. Alan Jope, Unilever’s chief executive, said he welcomed the “increased transparency” the vote on a detailed plan would represent.

However, the effort so far has been to persuade companies to introduce their own votes. In January the Investor Forum, a group representing UK institutional investors with around £695bn under management, called on government to mandate a vote on climate plans ahead of the COP26 conference on climate change in Glasgow later this year.

Andy Griffiths, executive director of the Forum, says: “In 2021, the focus on how companies and investors can advance the UK’s net zero commitments will rise still further. We argue that the UK has a unique opportunity to lead the world by embracing a ‘say-on-climate’ ahead of COP26.”

There are other supporters for measures to push companies to progress their climate action plans. Fiona Reynolds, chief executive of Principle for Responsible Investment, told Board Agenda: “While there are many leaders across both the corporate and investment spheres, many others lag behind when it comes to taking meaningful action on climate change, including setting targets for 2050 along with nearer-term targets and action plans.

“Any initiatives that accelerates action by the private sector are welcome.”

However, not everyone is impressed. Robert Eccles, a professor at Oxford University’s Saïd Business School and an expert on the integration of ESG factors into company policies, says voting on climate plans is “well-intentioned, futile and a drain on the engagement bandwidth of investors” who have others tools for pushing companies to come to terms with climate change.

Writing in Forbes, Eccles argues climate votes could “insulate” directors from accountability. He also believes investor efforts would be better focused on a few companies in key sectors to set an example rather than attempting to persuade all companies at the same time. “I believe that banging a few heads hard will lead to more rapid change than gently tapping on many heads at the same time,” he writes.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • Investor group calls for shareholder votes on climate strategy
    January 13, 2021
    Group of raised hands on green background

    The Investor Forum says greater shareholder influence over climate strategy will increase pressure on boards to meet UK net zero targets.

  • Shareholder votes on climate action plans 'more complex' than expected
    July 15, 2021
    Climate action protest

    Report reveals that since 2019 only 32 companies have agreed to submit their climate action plans to a shareholder vote.

  • US watchdog raises hurdle for shareholder votes
    November 3, 2017
    SEC, Securities and Exchange Commission

    Guidance from the US financial watchdog widens the use of a rule which allows companies to exclude shareholder proposals, potentially making it easier for companies to resist votes on social or ethical grounds.

  • LGIM names companies performing badly on climate change
    June 12, 2018
    China Construction Bank

    Investment manager Legal & General Investment Management increases pressure on companies over climate change by naming those it has disinvested from.

For thoughtful journalism, expert insights on corporate governance and an extensive library of reports, guides and tools to help boards and directors navigate the complexities of their roles, subscribe to Board Agenda

AGMs, climate policy, climate risk, investors, LGIM, Sacha Sadan, shareholder votes, shareholders, strategy

Search


Sign up to our Newsletter

Receive independent news, thoughtful journalism & expert insights about leadership, corporate governance & key boardroom issues straight to your inbox every week.

SIGN UP

Follow Us


 

 

 

 

 

Most Popular

  • ESG is not a ‘distraction’
  • Virtual AGMs fall out of favour
  • Cyber security reporting falls short
  • How to ensure governance of artificial intelligence (AI)
  • Consumers judge a company by its ‘morality’

 


 

Featured Partner Profile

Diligent

Diligent

Diligent Corporation, which was founded in 2001, is headquartered in New York, NY with a European HQ in London. Diligent’s modern governance platform empowers leaders and teams at every level of the organisation to digitally transform and create ...

Featured Partner Resources

Board Transformation 2021: Leadership in Transition

There can be little doubt that the global Covid-19...

Digital Boards: How Technology Adoption is Driving Culture Change and Resiliency

Digital tools proved their worth to boards during ...
EQ 2021 AGM Season report

2021 AGM Season: Successful AGMs in the Pandemic and Beyond

With the impacts of Covid-19 hitting just as the s...
Leadership in AI report

Leadership in AI 2021

This report from Board Agenda and Mazars, in assoc...
Creativity in a Crisis: a Boardroom Map for Innovation

Creativity in a Crisis: a Boardroom Map for Innovation

In the uncertain times at the height of any crisis...
Board Directors Guide to D&O Liability Insurance - November 2020 - AIG & Board Agenda

Board Directors' Guide to D&O Liability Insurance

Directors face liability over a range of new threa...
Leadership-in-Risk-Management-Board-Report

Leadership in Risk Management: Board Report

Board Agenda, in association with Mazars and INSEA...
Director's Guide to Internal Investigations

A Director's Guide to Conducting Internal Investigations

An internal investigation must be handled meticulo...

Global Business Complexity Index 2021

The Global Business Complexity Index 2021 provides...

 


 

ADVERTISE – FREE CORPORATE LISTING

FREE - Add your company profile to our Corporate & Advisory Directory.
ADD

ADVERTISE – PROMOTE YOUR REPORTS & WHITEPAPERS

FREE - Add your company profile to our Corporate & Advisory Directory.
Add Resource

Register Free

Register to receive free article views, selected resource downloads, and all the latest news alerts straight to your inbox. Register


  • Editors & Contributors
  • Corporate & Advisory Services
  • Media Marketing Solutions
  • Contact Us
  • Careers
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
  • Sitemap
|