LGIM dials up climate engagement

Legal & General Investment Management (LGIM) has announced the results of its seventh Climate Impact Pledge – its annual engagement programme to encourage companies to tackle climate change and the transition to net-zero carbon emissions.

LGIM has this year expanded the scope of the Climate Impact Pledge and is now assessing 5,000+ companies across 20 climate critical sectors, up from the 1,000 companies across 15 sectors in last year’s pledge.

Its quantitative analysis identified 299 companies that qualify for AGM voting sanctions for not meeting its minimum standards to address climate risk.

LGIM has also conducted more targeted and direct engagements with 105 major companies, up from the 60 companies identified in 2021.

These “dial-mover” companies are selected because of their size and potential to galvanise action on climate in their sectors. Engagement is usually year on year, with consequences including voting sanctions and, for applicable funds, divestments.

LGIM will apply voting sanctions against 43 of these companies, including the 12 companies that remain on LGIM’s divestment list. These companies are: AIG, China Construction Bank, China Resources Cement, Exxon Mobil, Hormel, Industrial Commercial Bank of China, Invitation Homes, KEPCO, Loblaw, MetLife, PPL and Sysco.

Two further companies have been added to the list for failing to meet their standards on climate – these are Air China and COSCO Shipping Holdings.

It’s not all bad news. China Mengniu Dairy has been reinstated, as following direct engagement, it has published a deforestation policy, committed to carbon neutrality by 2050, and delivered on LGIM’s red lines.