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.
…
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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Looks like they are trying to manipulate the market to the advantage of their investments.
It does raise the question of just how much cooling in the North Atlantic from ARGO data and global satellite temps would be required to be noticed in the advocacy crusades.
http://www.climate4you.com/images/NOAA%20SST-NorthAtlantic%20GlobalMonthlyTempSince1979%20With37monthRunningAverage.gif
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.
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.
🙂
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.
Subaru? Not doing enough? Really?
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.