U.K.'s Biggest Asset Manager to Target 500 Companies on Climate
October 14 2020 - 8:13AM
Dow Jones News
By Maitane Sardon
Legal & General Investment Management, the asset-management
arm of Legal & General Group PLC, said Wednesday that it will
send letters to 500 large companies asking them to take more action
to tackle climate change as part of its goal to align its portfolio
with the Paris Agreement.
LGIM, one of Europe's largest asset managers with $1.5 trillion
in assets, said it has created-climate ratings for 1,000 companies
across high-emitting sectors that it will make public on its
website under a traffic-light system.
It said it will score companies against global standardized
climate metrics, including whether their disclosure of emissions is
in line with the Task Force on Climate-related Financial
Disclosures, a voluntary framework widely used by companies.
LGIM will send letters to the 500 companies that its ratings
show are falling short of meeting its standards and will engage in
direct dialogue with 60 companies. It added that it will give the
companies guidance on how to reduce their emissions and which
policies they need to implement.
If companies fail to meet its minimum standards, LGIM said it
would use its vote at annual meetings or potentially remove the
holdings from its portfolios as it did in 2019 with oil major Exxon
Mobil Corp. LGIM removed Exxon's holdings from its 4.3
billion-pound ($5.6 billion) Future World funds in June 2019,
citing the company's lack of progress on emission disclosures and
targets.
"Those sanctions really exist to send a very strong message not
only to the companies, but to the rest of the sector as we are
saying that it matters what the biggest oil-and-gas company does,"
said Meryam Omi, head of sustainability and responsible investment
strategy at LGIM. "We have found that sanction model to be
powerful."
Ms. Omi said the response from clients to LGIM's approach to
climate issues and its engagement with companies--its so-called
climate pledge--has been very positive since the asset manager
launched its environmental campaign in 2016.
Write to Maitane Sardon at maitane.sardon@wsj.com
(END) Dow Jones Newswires
October 14, 2020 08:58 ET (12:58 GMT)
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