By Stephen Beer , Cristy Rodriguez , Anna Hirai
Through our Climate Impact Pledge, we encourage companies to reduce climate change risks and transition to a net-zero economy.
This blog summarises some of the highlights from our latest Climate Impact Pledge report, which you can read here.
We believe climate change is an important systemic risk to our clients’ portfolios. With the world recently experiencing its first annual average temperature overshoot of 1.5˚C,1 it is more important than ever to tackle this issue.
Our Climate Impact Pledge (CIP) assessments and engagements show there is much more that companies can do to mitigate climate risks to achieve net-zero carbon emissions by 2050. Over the years, we have seen some progress, but overall we consider that the transition must accelerate. This year, we have engaged with more companies than ever before.
We publish our expectations and engage with companies, on behalf of our clients, to encourage them to mitigate the systemic risks of climate change.
The Climate Impact Pledge assesses over 5,000 companies across 20 ‘climate critical’ sectors. These assessments can lead to vote sanctions, which are typically a vote against the company chair. Within this universe of companies, LGIM has engaged directly with a group of 100 ‘dial movers’, identified for their size and potential to galvanise climate action in their sectors. Where the rate of progress is too slow, vote sanctions and, where appropriate, even divestments can be applied.2 This is an example of our ‘engagement with consequences’ approach.
CIP by the numbers
- 5,000+: the number of companies across 20 ‘climate critical’ sectors covered by the CIP
- 100+: the number of selected ‘dial-mover’ companies for direct engagement chosen for their size and potential to galvanise action in their sectors
- 86%: the percentage of the total carbon emissions attributable to LGIM’s corporate debt and equity holdings covered by the CIP3
