Investor alliance based in the UK urges FTSE100 companies to hold climate-related shareholder votes

Investors Urge FTSE 100 Companies to Give Shareholders a Say on Climate Transition Plans

A coalition of investors with approximately £1.6 trillion in assets under management has called on the chairs of 76 FTSE 100 companies, including pharmaceutical firms like AstraZeneca, defense companies such as BAE Systems, and hospitality companies like Intercontinental Hotels, to allow shareholders to vote on climate transition plans.

The statement was made in regards to the considerable climate-related risks that major companies face and the implications for long-term company success. The coalition, which includes investment firms like BlackRock, Vanguard, and State Street, argues that allowing shareholders to vote on climate transition plans would enable them to make more informed investment and stewardship decisions.

So far, this approach has received twenty-one responses, with two firms intending to hold a vote on their transition plans at the 2024 AGM, and one intending to hold a vote at its 2025 AGM. Since 2023, the coalition has been pushing for a broader expansion of shareholder rights on climate issues.

In 2023, LAPFF and CCLA led an investor group writing to 35 of the highest emitting companies in the FTSE 350 index. The list also consists of several financial services companies, including banks such as HSBC and Lloyds, insurers like Phoenix and Prudential, and asset management firms like Schroders. Energy firms are not part of the current campaign as they have been the focus of an earlier one.

The coalition emphasises that companies should include material climate-related impacts in their financial statements and outline their climate strategies within these transition plans. This call to action comes after five companies from the earlier campaign had already put their transition plans to a vote, with energy firms like Shell facing shareholder pressure on transition plans in the past.

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 and hold them accountable for their management of material risks and opportunities. The coalition is urging companies that have not yet put their climate transition plans to a vote to give shareholders a say.

Shell's updated Energy Transition Strategy received the backing of a majority of shareholders earlier this year, despite criticism from climate campaigners for not outlining emission reductions within this decade. The coalition hopes that by giving shareholders a say in the transition plans, companies will be more accountable for their climate strategies and commit to more ambitious emission reduction targets.