Legal & General Investment Management says it will hold a “far more extensive” number of companies to account over climate change.
Climate ratings for over 1,000 companies in key sectors will be made publicly available under a ‘traffic light’ system on the fund manager’s website.
The selected companies are responsible for over 60% of the greenhouse gas emissions from listed companies, according to the UK-based fund manager.
Businesses that fall short of LGIM’s minimum climate risk standards, such as by lacking comprehensive emissions disclosure, will be subject to a vote against and potential divestment from select funds.
Michelle Scrimgeour, LGIM’s CEO and member of UK Government’s COP26 Business Leaders Group, said: “As governments around the world are set to announce new and ambitious climate policies ahead of next year’s COP26 conference, investors must also step up.”
In a statement coinciding with the release of LGIM’s annual ‘Climate Impact Pledge’, the asset manager said it intends to “ratchet up” the stringency of both its standards and sanctions over time.
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