Border to Coast has warned major oil companies and banks to make greater progress on climate pledges or risk losing its support on key votes during the AGM season
The Local Government Pension Scheme (LGPS) pool said that it would vote against the chair of the board of oil companies that fail to meet one of the first four indicators of the Climate Action 100+ benchmark covering emission-reduction targets.
It will also vote against oil companies scored 3 or lower by the Transition Pathway Initiative (TPI) – a rating that suggests they have not developed a strategic understanding of climate risks and opportunities or integrated this into business strategy and capital expenditure decisions.
In terms of banks, Border to Coast said it would vote against the chair of the sustainability committee where the institution has failed the first four indicators of the TPI framework for the sector. This includes banks that have not sufficiently integrated targets, decarbonisation strategy or climate policy engagement into business strategy.
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“Oil and gas companies are amongst the highest carbon emitters in our portfolios and must do more to address the systemic risk climate change poses,” said Jane Firth, head of responsible investment at Border to Coast.
As well as voting, Border to Coast said it would continue to engage with oil and gas companies on their decarbonisation strategy and capital alignment with net-zero goals.
“As a responsible investor representing asset owners with £60bn of investments, we will continue to leverage the strength of our collective voice to influence companies, via both voting and engagement, to drive greater progress,” Firth said.
Colin Baines, Border to Coast’s stewardship manager, added: “We welcome the adoption of net-zero targets by oil and gas companies, but we must now see transition plans that have a realistic prospect of delivering that objective.”
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