Investors demand companies manage climate change risk ahead of AGM season
Investment managers will demand to know what companies are doing to manage climate change in this year’s AGM season.
The Investment Association (IA), whose members own one third of the value of UK listed companies, is asking companies to report the impact of climate change will have on their business model and how it will be measured and managed.
The IA’s institutional voting information service (IVIS) will track companies’ progress, with investors wanting to see significant movement towards reporting in line with Task Force for Climate-related Financial Disclosures recommendations by 2022.
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Andrew Ninian, director for stewardship and corporate governance at the IA, said: “Climate change could result in a significant loss of value in companies if risks are not effectively measured and managed, ultimately hitting savers’ pockets.”
“Companies need to be looking at the impact of climate change on their business, products and strategy and set out to investors how they are responding to these risks.”
Last week the outgoing Bank of England governor Mark Carney demanded the City answer “calls to action” on climate change and help speed up the transition to a low-carbon economy.
The IA will also be increasing pressure on companies to improve gender diversity. The Ivis will now give a so-called red top to companies which have 20 per cent or less gender diversity in their senior leadership teams, as well as their boards.