Schroders, the UK listed asset manager with £447bn (€503.6bn) under management, has hosted what it terms an ‘educational event’ for 60 companies on climate change with environmental data body CDP.
“This quarter we tried a new approach to engagement,” the 200-year old firm said in its second-quarter sustainable investment report.
“It was an educational event on climate change for the board members of the companies in which we invest. We felt that many directors, especially outside of the resources sectors, lacked knowledge on the sizeable risks facing businesses across all sectors from climate transition risks. Education in this area is difficult to obtain, but necessary to equip board members to be good long-term stewards.”
A spokesperson declined to name the companies but did say they were mainly large-cap companies, “mostly but not entirely UK-based”.
At the meeting, Schroders explained its “analysis of the risks and opportunities, and the gap between winners and losers” to the attendees.
“We worked with the Carbon Disclosure Project (CDP) to be clear on what kind of disclosure is helpful, in particular given the framework promoted by the TCFD (Taskforce for Climate-related Financial Disclosures).”
Schroders also said it found it “worrying” that some asset managers are now 100% supporting climate change resolutions at companies, which could mean that investors are voting without looking at the merits of the resolutions.“Ownership doesn’t mean voting against management any more than it means always voting with them. For instance, overall support for climate resolutions is rising and a number of asset managers now record 100% support for climate resolutions on which they vote.
“Many directors lack lack knowledge on the risks facing businesses from climate transition risks.”
“This should be worrying; it likely reflects a lack of analysis of specific resolutions. We have consistently supported around 70% of the climate resolutions on which we had the opportunity to vote, remaining steady while the investment industry as a whole has begun to close its gap to our level.”
Illustrating this, it explained its reasons for not backing the Follow This resolution at Shell earlier this year, citing in part the “potential additional legal risk that Shell could be susceptible to”.
“This is not a hypothetical risk: we have already seen municipalities in the US filing lawsuits against oil majors, including Shell.” Schroders says that, while the oil major has taken an “industry leading position”, it would continue to engage the company on these issues.
Meanwhile the firm has also updated its Climate Progress Dashboard, finding that the pace of climate change remains double the international target set by the Paris Agreement.