Britain’s biggest investor abandons AIG, others from certain climate funds

LONDON, June 15 (Reuters) – Legal & General Investment Management, Britain’s largest asset manager, said on Tuesday it would abandon four companies from a number of its funds over their “insufficient” response to the challenge climate change, including the American insurer AIG (AIG.N).

The others to divest are Chinese lender Industrial and Commercial Bank of China (601398.SS), US utility holding company PPL Corporation (PPL.N) and Chinese dairy holding company China Mengniu Dairy (2319.HK) .

Not all of them had adequately responded to the companies’ commitment or had violated LGIM’s “red lines” regarding involvement in the coal sector, their carbon disclosures or their links to deforestation, the manager said. of funds in a press release.

They join nine other companies previously excluded over similar breaches by LGIM, which manages 1.2 trillion pounds ($ 1.7 trillion) in assets, including US oil major Exxon Mobil (XOM.N) and Korea Electric Power. Corporation (015760.KS).

As part of its Climate Impact Pledge launched in 2018, LGIM, which is part of insurer Legal & General (LGEN.L), said companies would be excluded from actively managed funds holding some £ 58bn of assets and that all four would be subject to voting sanctions using shares held over its entire equity portfolio.

“We have been making consistent demands over a period of several years … (companies) are really not meeting what we see as basic minimum standard expectations in terms of managing climate change in their industries,” said Yasmine Svan, Senior Sustainability Analyst at LGIM.

The exclusions follow a commitment made by LGIM in October to increase the number of companies with which it engages on climate change from 100 to 1,000.

The push was already starting to bear fruit, LGIM said on Tuesday, with 22% of companies on its “priority” list now setting a net zero carbon emissions target.

In the current annual general meeting season, LGIM said 130 companies would face votes against for failing to meet its minimum standards on climate change, mainly in the banking, insurance, retail and commercial sectors. real estate, technology and telecommunications.

As global policymakers prepare for the final round of climate talks in Glasgow later this year, LGIM chief executive Michelle Scrimgeour said asset managers must also step up their efforts.

“We cannot progress by acting in isolation and we, as investors, have a real role to play in the responsible allocation of capital and as stewards of our companies in which we invest to encourage larger progress towards our overall sustainable development goals. “

Mengniu said he “proactively supports the goal of achieving carbon neutrality by 2060 and leading the industry in the commitment to carbon neutrality with regular emissions reduction targets and disclosure of a roadmap”.

“In 2021, Mengniu will complete the detailed accounting of carbon emissions data of its subsidiaries, formulate carbon emission reduction targets and action plans, and thereby reduce the carbon footprint of products,” said the society.

($ 1 = 0.7056 pounds)

Reporting by Simon Jessop Editing by Rachel Armstrong and David Evans

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