Legal & General Investment Management (LGIM), one of Europe’s largest asset managers, announced today several new divestitures, due to insufficient action at the companies to address the risks posed by climate change.

The divestitures are being made under the framework of LGIM’s Climate Impact Pledge. As part of the pledge, LGIM has committed to engage 1,000 companies in 15 climate-critical sectors, that are responsible for more than half of greenhouse-gas emissions from listed companies, with companies falling short if the investor’s standard subject to voting sanctions, and potentially divestiture.

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Michelle Scrimgeour, Chief Executive Officer, Legal & General Investment Management and co-chair of the UK Government’s COP26 Business Leaders Group, said:

“Climate change is one of the most critical sustainability issues we face and we fully support efforts to align the global financial system with a pathway well below 2°C. We have made a strong commitment to push forward this agenda across the different parts of the investment chain, from our engagement with companies and policymakers through to our own investment process and LGIM’s own commitment to net zero. Participating in forums like the COP26 Business Leaders Group, ahead of the pivotal climate conference in Glasgow later this year, has emphasised the necessity of coordinated action to address climate risk and steer society towards a sustainable future.”

LGIM is adding four companies to its divestment list, including Industrial and Commercial Bank of China, AIG, PPL Corporation and China Mengniu Dairy, citing “unsatisfactory responses to engagement and/or breaches of ‘red lines’ around coal involvement, carbon disclosures or deforestation.” Other companies on the list include China Construction Bank, MetLife, Japan Post, KEPCO, ExxonMobil, Rosneft, Sysco, Hormel and Loblaw.

LGIM also announced that it is removing US food retailer Kroger from its exclusion list due to improvements at the company regarding its deforestation policies and disclosure, as well as efforts to promote lower climate impact plant-based products.

Yasmine Svan, Senior Sustainability Analyst at LGIM added:

“Improvements in data and analytics have allowed us to increase our coverage and to enforce what we consider to be  minimum standards with regards to climate risk management, through expanded voting sanctions, supplemented by our in-depth engagement with pivotal sectors. At the same time, as investors step up their scrutiny of companies, so too are companies raising their ambitions. We are pleased to be able to add to the number of companies reinstated in our funds following progress and will continue our engagement and collaboration to help increase overall standards across markets.”