Legal & General is selling out of the world’s biggest shipowner due to what it sees as a lack of commitment to climate change.
The UK financial services giant’s Legal & General Investment Management (LGIM) said state-controlled behemoth Cosco Shipping Holdings does have an operational target, “but the level of ambition for this target is low compared to leading peers. There is no commitment or investment in low-carbon fuels, which is key to sector decarbonisation.”
Cosco Shipping Holdings is listed in Shanghai and has 970 vessels, including tankers, bulkers, container ships, LNG and LPG carriers, multipurpose vessels, car carriers, ro-ros, ferries and general cargo units.
LGIM is one of the world’s largest asset managers.
The announcement was made as it unveiled the results of its seventh climate impact pledge, designed to encourage companies to tackle climate change and the transition to net-zero carbon emissions.
“As the window to limit global warming to 1.5 degrees narrows, LGIM has this year expanded the scope of the climate impact pledge, holding more companies to account than ever before through voting and investment sanctions,” LGIM said.
The group is now assessing more than 5,000 companies across 20 climate-critical sectors, up from 1,000 last year.
It has identified 299 companies through its quantitative analysis that qualify for annual general meeting voting sanctions for not meeting its minimum standards to address climate risk.
Other companies on the divestment list include AIG, China Construction Bank, ExxonMobil and Industrial & Commercial Bank of China.
Too slow to act
Michael Marks, LGIM’s head of investment stewardship, said: “Companies which are too slow to act are contributing to systemic risk. It is imperative that investors play their part, by expanding and deepening the scope of their climate engagement, and encouraging companies to scale up their ambitions and reduce real-world emissions.”
Chief executive Michelle Scrimgeour added: “There has never been a more important moment to address the generation-defining challenge of climate change. And yet, after a year of geopolitical and economic upheaval, global efforts to spur the energy transition are wavering.
“We believe policymakers, investors and industry leaders must use every legitimate tool at their disposal in order to mitigate the systemic risk posed by climate change. Every part of the global economy needs to adjust.”
Cosco has been contacted for comment.
The shipowner is aiming for carbon neutrality before 2060.
