The health of our planet is indivisible from that of the world economy, politics and society. I believe that our work on the energy transition is made more crucial, not despite these other challenges, but because of them.
Nevertheless, we need to remember that this is a transition – a marathon, not a sprint. We need to stay the course and work with all the actors who are part of this monumental shift.
As you know, COP26 did indeed go ahead in person, and I was proud to represent Legal & General as co-Chair of the COP26 Business Leaders Group alongside the government minister, Rt Hon Alok Sharma MP, President of COP26.
We made some real progress during the talks, particularly in renewed commitments to halt deforestation and phase down coal. However, as it stands today, companies are not going far enough to meet the goal of constraining global warming to 1.5°C by 2050.
With one estimate showing that listed corporates are responsible for 40% of global emissions, it’s imperative that they step up. As you can read in this year’s report, many of our investee companies are increasingly on board, with a slew committing to net-zero targets, which therefore led us to vote against companies on 35% fewer occasions over the past year than during the previous one. Yet there remains much more to be done, particularly in setting out detailed plans of how to get there. We do not shy away from difficult conversations. The 59 priority engagements and 14 companies on our divestment list are testament to our commitment to continue pressing for higher standards in the market. It’s not principles before profit. It’s simply good business sense.
Beyond working with policymakers and supporting our clients in transitioning their portfolios to net zero, one of the key means by which asset managers can support the move to a low-carbon economy is by acting as responsible stewards. That means engagement with the companies in which we invest on behalf of our clients.
From a personal perspective, my experience as co-chair of the COP26 Business Leaders Group over the past 18 months has demonstrated the power of bringing together diverse stakeholders from different companies, sectors and geographies to advocate for change. That’s why we’re proud to be working with governments across the world through initiatives such as the Glasgow Financial Alliance for Net Zero (GFANZ), the Sustainable Markets Initiative (SMI) and the UK Transition Plan Taskforce (TPT).
So, as we move towards COP27, I’m excited by what we can achieve together – not just as one company, country or investor collective, but as many – to tackle the urgent challenge of climate change.
To read the full Climate Impact Pledge report, please click here.