Investors with $14tn call for company climate action plan

Currently, around a fifth of the world's 2,000 largest companies have a plan to transition to a low-carbon economy

Lethabo Power Station, a coal-fired power station owned by state power utility Eskom, is seen near a maize field near Sasolburg, South Africa. Ahead of the next round of climate talks in Scotland in November, countries the world over are committing to reach net-zero greenhouse gas emissions by the middle of this century in an attempt to stop catastrophic climate change. REUTERSShow less

Investors managing $14 trillion in assets on Friday said they wanted all companies to set a climate transition plan and allow them to vote on it, ahead of next year's season for annual general meetings.

The 53 investors, including UBS Asset Management, DWS and Legal & General Investment Management, said they were setting new expectations for companies as more firms publish plans to transition to a low-carbon economy.

Currently, around a fifth of the world's 2,000 largest companies have done so, the investors said.

Ahead of the next round of climate talks in Scotland in November, countries the world over are committing to reach net-zero greenhouse gas emissions by the middle of this century in an attempt to stop catastrophic climate change.

The investor group's statement, through the Institutional Investors Group on Climate Change, calls for all companies to produce a net-zero transition plan in line with the Taskforce on Climate-Related Financial Disclosures reporting framework.

In addition, companies need to identify which board directors, in addition to the chair, would lead the efforts and be the focal point for engagement by investors, and who would be voted against if the plan was considered inadequate.

The investors also said, where applicable with local law, they wanted companies to provide an advisory vote on the plan's implementation, Failing that, investors could look to express their opinion by voting on other resolutions, such as the re-election of board members.

"Transparency and accountability are critical to the effective delivery of net-zero commitments. Putting corporate net-zero alignment plans to the vote will allow shareholders to send a clear message to the Board on the scale and pace of implementation,” said Stephanie Maier, global head of sustainable and impact investment, Gam Investments.

The push for a vote follows the launch of a 'Say on Climate' campaign by hedge fund billionaire Chris Hohn last year and similar votes in this year's AGM season at companies including Shell and Unilever.

Victoria Barron, head of sustainable investment, BT Pension Scheme Management added: "This statement emphasises that investors want to see net-zero strategies, they want to have the right to vote on them and they want clear accountability, metrics, and targets.”