Largest British Asset Manager Demands Board Changes Because Climate Change

Guest essay by Eric Worrall

Legal & General, Britain’s largest asset manager and the second largest European asset manager, has demanded the removal of eight chairmen from major global companies because L&G are unsatisfied with their response to climate change.

Investor LGIM seeks removal of eight company chairs over climate change inaction

Simon Jessop

JUNE 11, 2018 / 9:28 AM

LONDON (Reuters) – Britain’s biggest asset manager wants to remove the chairmen of the board at eight companies worldwide, which it says have failed to confront the threats posed by climate change.

Legal & General Investment Management, the fund arm of insurer Legal & General (LGEN.L), has been among the most vocal asset managers on the topic, recently writing to some of the world’s top companies calling for more action.

On Monday, it said it would vote against the chairs of China Construction Bank (601939.SS), Dominion Energy (D.N) and Japan Post Holdings (6178.T), as well as Occidental Petroleum (OXY.N), Rosneft Oil (ROSN.MM) and Subaru (7270.T). The other two companies on its list were Loblaw Companies (L.TO) and Sysco Corp (SYY.N).

As well as demanding the removal of the companies’ chairmen, LGIM also said it would sell any shares of the eight companies held in its 5 billion pounds ($6.7 billion) Future World Funds index funds range.

After spending a year engaging with 84 of the world’s biggest firms over their climate strategies, LGIM, which manages nearly 1 trillion pounds ($1.3 trillion) in assets, said some were not doing enough to prepare for a low-carbon economy.

Read more: https://www.reuters.com/article/us-l-g-funds-climatechange/investor-lgim-seeks-removal-of-eight-company-chairs-over-climate-change-inaction-idUSKBN1J6133

L&G have demanded companies pay more attention to climate action – but what if L&G are wrong about climate change? What measures have L&G taken to protect their investor’s capital, against the very real possibility of a global collapse in political support for green subsidies?

From their website, Legal & General appear to have substantial capital exposure to the low carbon economy, such as an unspecified stake (<50%) in NTR Wind 1 LP Fund, described as a €246 million onshore wind farm programme, NTR Wind Management DAC and Oxford Photovoltaics, along with a number of urban regeneration projects and other assorted businesses.

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53 thoughts on “Largest British Asset Manager Demands Board Changes Because Climate Change

  1. Suicidal Europeans keep finding new and ever more perverse ways of destroying their culture and civilization.

    Europe is doomed.

      • The people demanding this “climate change” don’t give a damn about the climate. What they’re still after is their elusive global “carbon tax” (read: compulsory revenue streams of tribute based on each nation’s predetermined “carbon emissions”–from cows to refineries.

        If nations are financially forced to pay this UN tax, the money will be used to fund the global government’s bureaucracy that’s to be managed and run out of the UN, with London’s international banking cabal–who also own the UN–in charge.

      • hanelyp

        We good people voted for Brexit but are being undermined by remainers playing political games and a weak government led by Theresa May. Even her head Brexit Minister David Davis (who should have been PM long ago) has threatened to resign if she doesn’t show some balls.

  2. I suspect they have made a major financial “bet” on the climate change industry. The “bet” may not be going to plan.
    By making the list public, they have just given skeptical investors like me a list of international companies to research. I am only small fry investing my retirement savings, but I bet I am not alone. I must check to see what they have invested in, to make sure I avoid it in the future.
    Disclaimer, any and every “Green” investment I looked at has turned to dust. I am biased.

    • It does have some aspects of a squeeze play; except their demands to damage people’s careers has far more aspects of racketeering.

    • I suspect they have made a major financial “bet” on the climate change industry.

      Of course, they made a “financial bet”.

      The financial Stock Markets are the greatest ‘poker games’ ever devised by humans.

      If you got money or you are given a stock Certificate(s) …… then you too can join in with one or more of those “great poker games” and do your own “bidding” as you see fit …… or “pass” by taking all or part of your “winnings” out of the “pot”, or take what’s left of your investment out of the “pot”, etc.

      Or, you can pay someone (broker) to be your designated “player” in those “great poker games” and you “win”, if they “win”, ….. that is after the broker take “their cut”, …… the “house” takes its “cut” ….. and the “government” takes its “cut”.

      And remember, you don’t lose money just because stock prices are “down”. You only lose money if you sell your stock when its price is down below what you paid foe it.

      Also, you don’t make money just because stock prices are “up”. You only make money if you sell your stock when its price is higher than what you paid for it.

    • “The “bet” may not be going to plan.”

      … and trying to rig the market in this way is very likely illegal !

  3. Oh Boy, looks like a buying opportunity when these morons dump their stock and (temporarily) drive down the price. Let’s just see if Buffet buys.

  4. To: The LGIM Board of Directors
    From: Planet Earth
    RE: Investor LGIM seeks removal of eight company chairs over climate change inaction

    Dear Sirs/Madame,

    Piss Off! I need the CO2 to feed the starving plants!

    Sincerely,
    Planet Earth

  5. They do it to appeal to a group who are into ethical investing, it’s a stunt to gain a headline for that group nothing more. We have the same in Australia a couple of these tried to get climate change things put into big companies but I think the most I have ever heard is them getting to 20% of the vote so they failed miserably.

    By there nature these companies have to diversify to avoid risk and so they only ever make up a small percentage of any given company. As such they no dam well they have near 0% chance of getting any of this rubbish up so it is by definition a stunt. What they get is perhaps a news paper headline and they can put on the advertising that they did it.

    • A number of Australian banks have put out ‘principled’ statements that they will never invest in coal, etc. It would have more substance if they had ever been asked to invest in coal, but they’re too small beer for the miners to have bothered with. Nothing but virtue signalling.

  6. Have to wonder how this kind of thing will look five years from now if we experience significant global cooling…

    • That was probably a good idea since L&G management is clueless when it comes to CO2 and CAGW.

  7. The Future World Fund index fund is just one of Legal&General’s funds and it is one that specifically aims at climate change. http://update.lgim.com/futureworldfund

    So this is just one part of the organisation seeking to attract the fools who thing CO2 causes catastrophic climate change. The “ manages nearly 1 trillion pounds” is irrelevant because most of that money is sensibly invested. They are just making sensational statements to attract the stupid.

  8. Is Soros connected to Legal and General in one way or another? Drive down the price, then buy cheaply and make a huge profit…Isn’t it a manipulation worth being looked after by stock exchange supervision?

    • That makes no sense. You don’t drive down the price of a stock you own. And if selling drives the price down, buying the same amount would drive the price up. So the net is the same.

      A shareholder asking the company he owns to do something can never be stock manipulation.

      • Sorry, but I didn’t say he owns stocks of Legal and General but I asked whether he is connected to them in one way or another. This might also mean that some member(s) of the management are on his secret payroll good friends.

    • You don’t buy shares at fire sale prices to make a quick buck. It’s a long game move to increase your stock in a company you predict is going to make a rebound, and thus increase the overall value of your portfolio at a reduced risk.

      Day-traders looking for short-term profit won’t waste their time on penny stocks. They look for the hot new shares going up at a good clip that will net them a good return by the end of the day.

  9. I see this as good news for climate realists. The article observes that their website indicates L&G have “substantial capital exposure to the low carbon economy,”. In other words, they’ve staked a lot of (their customers’) money on the assumption that climate action will continue to grow. If events were proving them right, they’d now be sitting back and feeling pleased with themselves for their foresight. The fact that thy’re calling instead for the heads of major international companies to be removed means that they’re not.
    Conclusion, L&G backed the wrong horse, big time, and are now trying to push water uphill. (With apologies for the mixed metaphor).

    • But…Calling for the heads of major “Carbon Intensive” International Corporations could negatively impact their bottom line Stock Price valuation thereby making the other investments more profitable.

  10. Climate Puritanism will do more to destroy the status and trustworthiness of the UK financial industry, than even Brexit. Preach on, you fools – Britain’s financial industry is in need of a haircut.

    (I am British myself and feel that our country trusts too much in the financial industry at the expense of engineering, manufacturing and real industry.)

      • @Phoenix44;
        Not from L&G. They are not in the business of writing IPO’s, and that’s where companies get their capital infusions, not via trade on the secondary markets.

  11. Fund managers have their people in many Australian public companies including BHP (World’s largest mining company). BHP’s CEO and Chairman are left-wing appointments. CEO Andrew Mackenzie met Donald Trump to beg him to stay in the Paris Agreement. The green cartel threw all their most senior CEOs at Trump prior to the Paris decision. It was a Black Rock led green cartel co-ordinated pitch to Trump.

  12. So, they are going to vote against the chairs but they also say they are going to sell the shares they own. That would indicate their problem is with the companies business and not the people running the companies.

    Also voting against the chair then selling their shares is kind of a jerk move. Just sell the shares and let the company get on with their business. Don’t mess with the operations of a company you don’t want to own shares in.

  13. People putting money were their mouth is. Money people trusted them with, not taxpayers, and doing it while all can see (so that, if you are one who trusted them money, you can just quit if you don’t like the move). Just fine to me.
    Besides, growth is in service and the like, with relative low carbon use, compared to manufacturing. So whatever the rationale, heading for “low carbon” can inadvertently be a smart move.

    • So what has China been consuming over the last decade or so, manufactured goods like iPods and cars or services?

  14. As Richard Briscoe remarks astutely, this is an attempt by L & G to prop up their dud investment in Green nonsense. It won’t work.

  15. It’s far past time that someone stood up to funds and their managers, like L&G, and told them to stuff it. Dumping shares in those companies mentioned will not hurt the companies. Eternal summer is not going to happen here any time in the foreseeable future. This is NOT Pleasantville.

    L&G is a money generator, not a manufacturer of any kind of product. They rely on dividend income from those companies in which they bought shares. Since they disapprove of the management, and they want to dump their shares in those companies, it may drop the per share price temporarily, maybe enough to make the share price attractive to smaller investors who want the dividend income.

    Rosneft? Doesn’t that mostly belong to Vlad Putin? Does anyone besides me think he really gives a flying squirrel in space what L&G’s board wants? Anyone? Bueller?

    It rained overnight again in my kingdom, watered the lawn, etc., and dropped the temperature indoors enough for me to run the furnace again. Mid-June, and I’m running the furnace. Fine. I can live with it. At least I can afford to stay warm. I have sincere sympathy for anyone living under the thumb of people who think the world is going to have the kind of weather they dictate.

  16. Taking note of their logo, it’s nice to see the Umbrella Corporation is taking time out from ravaging the earth with a zombie plague to “think green”.

  17. The demands made by L&G would seem to violate their fiduciary duty to their own investors by trying to double down on renewables.

  18. Looks like they are trying to manipulate the market to the advantage of their investments.

  19. Sysco Corp? They distribute large cans of ketchup and mayonnaise to school cafeterias? What is the their role in CAGW?

    Rosneft? is a Russian company. Any resident of the UK who messes with them is liable to breath poisoned gas.

  20. Making investment decisions based upon popular fads about climate is very concerning. Investment management has turned political. And such naked ambition is a serious step away from fiduciary responsibility.
    At some 1 Trillion under management, this would be mainly pension fund money. Those responsible for the latter should remove their funds.
    If “L&G” is this stupid on climate, how sound is their decision-making on just straight managing the funds?
    Financial Times–Please copy.
    🙂

  21. Well, my old building society told me a few weeks ago that my existing buildings insurer was being replaced by Legal & General, and invited me to sign up with them. I was all set to do so, and only an oversight stopped me doing it this afternoon. Well, I’ve just changed my mind. Perhaps I’ll ring them up and tell them why.

    Rich.

  22. This is so 2007, what the hell are they thinking?! Whoever came up with this stupid plan ought to be thrown out on their ear.

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