LGIM's ‘leaders and laggards’

Legal & General Investment Management (LGIM) has today revealed the corporate leaders and laggards on climate change, following the first engagement period under its Climate Impact Pledge.

LGIM introduced the Climate Impact Pledge in November 2016, focused on accelerating the progress companies are making in addressing climate change and transitioning to a low-carbon economy. Since LGIM began an engagement process in April 2017, climate scores for US companies have improved, with median Japanese, Australian and South Korean companies also improving. In contrast, median French, UK and German companies have not.

The rankings have also revealed contrasting approaches by sector, with utility companies both some of the best and worst performers. Oil and gas companies, utilities and auto-manufacturers saw overall improvements in their scores over the engagement period.

LGIM’s assessment also revealed those companies that are making significant progress and leading initiatives to address climate risk. These include: Spanish utility Iberdrola, Oil and gas major Total, BNP Paribas, and Nestlé.

As part of the pledge, LGIM committed to vote against companies that have shown persistent inaction to address climate risk and divest its Future World range from these companies.

Meryam Omi, head of sustainability and responsible investment strategy at LGIM said, “Climate change is a significant issue for society and investors, and we have a limited amount of time to act. We engage with companies to positively influence their governance, strategy and transparency. Divestment is a consequence but it is not the aim. We want to show that the transition to a low-carbon economy is possible and work with companies towards this goal.”

LGIM assessed 84 companies on over 50 indicators. The best and worst performers in the main categories are listed below.

Statement on Climate Change
Leader: Nestlé
Laggard: Russia’s Rosneft Oil

Leaders: Norwegian energy company Statoil (now called Equinor), Bank of America Merrill Lynch and BNP Paribas
Laggard: China Construction Bank

Board Governance
Leader: BHP Billiton
Laggard: CK Infrastructure Holdings

Business Strategy
Leaders: Total and BHP Billiton

Public Policy
Leader: Iberdrola
Laggard: The second largest utility in the US, Southern Company.

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