Guest essay by Eric Worrall

Legal & General, Britain’s largest asset manager and the second largest European asset manager, has demanded the removal of eight chairmen from major global companies because L&G are unsatisfied with their response to climate change.

Investor LGIM seeks removal of eight company chairs over climate change inaction

Simon Jessop
JUNE 11, 2018 / 9:28 AM

LONDON (Reuters) – Britain’s biggest asset manager wants to remove the chairmen of the board at eight companies worldwide, which it says have failed to confront the threats posed by climate change.

Legal & General Investment Management, the fund arm of insurer Legal & General (LGEN.L), has been among the most vocal asset managers on the topic, recently writing to some of the world’s top companies calling for more action.

On Monday, it said it would vote against the chairs of China Construction Bank (601939.SS), Dominion Energy (D.N) and Japan Post Holdings (6178.T), as well as Occidental Petroleum (OXY.N), Rosneft Oil (ROSN.MM) and Subaru (7270.T). The other two companies on its list were Loblaw Companies (L.TO) and Sysco Corp (SYY.N).

As well as demanding the removal of the companies’ chairmen, LGIM also said it would sell any shares of the eight companies held in its 5 billion pounds ($6.7 billion) Future World Funds index funds range.

After spending a year engaging with 84 of the world’s biggest firms over their climate strategies, LGIM, which manages nearly 1 trillion pounds ($1.3 trillion) in assets, said some were not doing enough to prepare for a low-carbon economy.

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Read more: https://www.reuters.com/article/us-l-g-funds-climatechange/investor-lgim-seeks-removal-of-eight-company-chairs-over-climate-change-inaction-idUSKBN1J6133

L&G have demanded companies pay more attention to climate action – but what if L&G are wrong about climate change? What measures L&G have taken to protect their investor’s capital, against the very real possibility of a global collapse in political support for green subsidies?

From their website, Legal & General appear to have substantial capital exposure to the low carbon economy, such as an unspecified stake (<50%) in NTR Wind 1 LP Fund, described as a €246 million onshore wind farm programme, NTR Wind Management DAC and Oxford Photovoltaics, along with a number of urban regeneration projects and other assorted businesses.