ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Investors fire warning shot over climate change

‘From next voting season you should increasingly expect to see investors vote against audit committee directors’ reappointment’


Pete Carvill

Investors representing over $7trn (€6.4trn) in assets have warned 17 European firms that they could challenge board directors over their accounting of climate risks.

The move was reported by Reuters, which wrote of a letter sent at some point between February and December by 34 investors that said the 17 firms—including BP and Volkswagen—were not moving fast enough on climate change.

As Yahoo Finance reported: “[…] the investors told the companies their accounts did not reflect the fallout from climate change on their assets and liabilities. For example, some assets may depreciate faster in value while demand for certain products may fall.”

Signatories to the letter reportedly included investment managers Sarasin & Partners, the fund arm of HSBC, French public pension scheme ERAFP, and BMO Global Asset Management EMEA.

In addition to the names above, it was allegedly sent to Air Liquide, Anglo American, Arcelor Mittal, BMW, Daimler, Enel, Equinor, Glencore, Rio Tinto, Saint-Gobain, Shell, Renault, CRH, ThyssenKrupp, and TotalEnergies.

Within the letter was a word of warning to the companies. Reuters reported that the contents included the phrase: “From next voting season you should increasingly expect to see investors vote against audit committee directors’ reappointment, where high-risk companies fail to meet the expectations.”

The role of investment in combatting man-made climate change has been a frequent subject on these pages in recent months. In March, Expert Investor reported on research from Robeco that indicated European investors and insurers were doing better at hitting net zero than their counterparts in the rest of the world.

According to Robeco, its 2022 Global Climate Survey found that 40% of European investors and 43% of insurance companies have made a public commitment to hitting the target, compared to an overall 27%. Across territories, only 11% of North American investors have made a public commitment to net zero, alongside 31% of those from the Asia Pacific region.

The report from Robeco reflect a growing trend, some say craze, on the continent for ESG investing. Back in January, Expert Investor reported that Broadridge’s The Rise of the Retail Investor white paper saw five trends and themes that the company says has pushing a democratisation of corporate governance within Europe.