European pension funds have joined asset managers in calling on corporates to better explain how they plan to deliver on “net-zero” commitments and to provide a routine shareholder vote on their transition plans.
Another ask is for companies to identify the directors responsible for their transition planning.
The expectations are set out in a statement coordinated by the Institutional Investors Group on Climate Change (IIGCC) and backed by 53 investors. These include pension funds such as CPEG in Switzerland and BT Pension Scheme, Universities Superannuation Scheme and local authority pension schemes in the UK. Nordic pension investors are also well represented among the signatories.
Victoria Barron, head of sustainable investment, BT Pension Scheme Management, said that although growing numbers of companies were developing net-zero plans “we need more urgent action and more consistent disclosure”.
“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,” she said.
In their statement, the investors acknowledged that the effectiveness of voting depended on the build-out of high-quality assessments of corporate net-zero transition plans and implementation, and said they would work with data providers and proxy advisers on this.
“Overall, the process represents a drive to a secure a step change in corporate governance on climate risk,” said the IIGCC. “This complements and helps strengthen existing activity already underway through ‘Say on Climate’, which has also achieved significant results alongside the outcomes of parallel corporate engagement taking place via IIGCC members.”
More than 10 companies, including Glencore, Nestlé, Shell, and Unilever, had already implemented measures outlined in the investors’ expectation statement, IIGCC said.