The £12bn Church Investors Group (CIG) has succeeded in raising the environmental standards of a number of UK FTSE 350 companies it considered to be “laggards”.
The Carbon Disclosure Project’s (CDP’s) FTSE 350 Climate Change Report, published yesterday, revealed 72% of 53 companies from the FTSE 350 contacted by the CIG improved their CDP score after being contacted by the CIG because they were considered to be behind the curve in this area.
The CIG, which is made up of 46 members connected with churches predominantly located in Britain and Ireland with combined asset of more than £12bn, has long prioritised market-wide engagement encouraging companies to report their carbon emissions through its CDP Engagement Programme.
This year the CIG prioritised companies that were either a FTSE 100 or FTSE 250 constituent operating in a carbon intensive sector with a Carbon Performance Score of D or lower for engagement. To achieve a C grade, a company must disclose a significant amount of information in its response to the CDP and be able to demonstrate positive actions, for example setting and meeting companywide carbon reduction targets.
CIG chairman Richard Nunn said: “Recent evidence from the scientific community reinforces the long held view that the actions of all of us are having a serious impact upon global temperatures. The Carbon Disclosure Project has continuously led the way in encouraging companies to manage their greenhouse gas emissions effectively and we are pleased that companies are striving to improve their score year on year.”
CIG vice-chair Bill Seddon added: “Members of the Church Investors Group take seriously our responsibility for promoting good stewardship of our planet and are committed to using our influential position as shareholders to persuade companies to consider their environmental impact.
“Yesterday’s CDP report highlighted the key role that the engagement work of church investors plays in promoting long-term thinking by the companies we invest in, as we encourage the transition to a low carbon economy.”
This initiative forms part of the CIG’s wider efforts to encourage environmentally responsible business practices in the businesses its members invest in. CIG members have also joined with other influential investors, including the Local Authority Pension Fund Forum (LAPFF) in the ‘Aiming for A’ initiative, co-ordinated by fund manager CCLA.
The CDP report said: “In a nutshell we’re asking 10 major UK listed utilities and extractives companies to aim for continuous inclusion in CDP’s Climate Performance Leadership Index (CPLI) by achieving and retaining an “A” Performance Band. Our capital stewardship work will involve filing supportive shareholder resolutions at some of these companies’ AGMs in due course.”
Local Authority Pension Fund Forum chairman Kieran Quinn said: “The ‘Aiming for A’ initiative provides a good example of how likeminded investors of all backgrounds can effectively collaborate to increase standards on issues of common concern.”
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