Investment managers are to increase pressure on investee companies’ commitments to manage climate change during this year’s annual general meeting season.
According to the Investment Association (IA), AGM season gives investors the opportunity to hold companies to account and ensure they are considering the long-term value of their businesses.
The organisation – whose members include the likes of Aberdeen Standard Investments and BMO Global Asset Management – has outlined its expectations of companies on issues such as climate change, executive pay, audit quality, and diversity.
This is the first time the IA is asking companies to explain in their annual report the impact climate change will have on their business model, and how the risks are being measured and managed.
Andrew Ninian, Director for Stewardship and Corporate Governance at the Investment Association, said: “Climate change could result in a significant loss of value in companies if risks are not effectively measured and managed, ultimately hitting savers’ pockets.”
“Companies need to be looking at the impact of climate change on their business, products and strategy and set out to investors how they are responding to these risks.”
Between them, IA members own one third of the value of UK-listed companies. Putting the spotlight on how these firms are dealing with climate change will provide “essential evidence” of how well prepared they are.
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