L&G’s fund arm to back climate votes at U.S., Canadian banks

By Simon Jessop

LONDON (Reuters) -Britain’s biggest asset manager, Legal & General Investment Management (LGIM), said on Thursday it would back a number of climate-focused shareholder resolutions at the annual meetings of eight leading U.S. and Canadian banks.

LGIM, insurer Legal & General’s fund arm, which manages around $1.5 trillion, said it was going public ahead as part of an escalation strategy after backing several climate votes last year.

“We continue to consider that decarbonisation of the banking sector and its clients is key to ensuring that the goals of the Paris Agreement are met,” LGIM said in a statement, referring to the world’s shared goal of capping global warming.

“Accordingly, we believe our support of many of these resolutions – depending always on the specifics of their drafting language and advisory or binding nature – is warranted.”

LGIM is a top-30 shareholder in all of the banks, according to Refinitiv data.

LGIM said it would back proposals for a time-bound policy to phase out lending and underwriting for fossil fuel exploration and development at Citigroup, Bank of America, Wells Fargo, Goldman Sachs, JPMorgan Chase and Morgan Stanley.

“We continue to emphasise that the boards of financial institutions need to closely consider their strategy and risk appetite towards fossil fuels into the near future,” it said.

LGIM said it would also support proposals calling for lenders to publish a report disclosing science-based absolute 2030 emissions reduction targets for high-emitting sectors at Royal Bank of Canada, Bank of America, Goldman Sachs and JPMorgan Chase.

It would also back votes calling for a report on how the bank is aligning its financing activities with its 2030 targets at Toronto-Dominion Bank, Bank of America, Wells Fargo, Goldman Sachs, JPMorgan Chase and Morgan Stanley.

“We believe detailed information on how a company intends to achieve the 2030 targets they have set… can further focus the board’s attention on the steps and timeframe involved and provides assurance to stakeholders,” LGIM said.

All the votes will go against the recommendations of the banks’ management, LGIM said.

Beau O’Sullivan, strategist for the non-profit Bank on our Future campaign said LGIM was “taking the only valid action that fiduciary investors should be taking with their investee banks now, and we urge others to follow their lead”.

($1 = 0.7993 pounds)

(Reporting by Simon JessopEditing by Mark Potter)