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Fund managers up ante on climate change after oil companies humbling

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Climate risk assessments must be incorporated into company accounts, the UK investment industry’s trade body has said in a letter to heads of the G7 countries.

The Investment Association wants sustainability reporting to be adopted as a standard and co-operation across borders to ensure measures are being implemented.

New guides also need to be agreed on the issuance of so-called “green gilts”, or sovereign debt issued to help fund environmentally friendly projects, said the IA.

“The meeting of the G7 is a prime opportunity for the world’s largest economies to take a coordinated, global approach to tackling climate change,” said Chris Cummings, chief executive of the Investment Association.

“Ensuring high-quality and comparable data on the risks that companies face from climate change is key to achieving this and meeting the net-zero targets.”

The letter comes after a string of successes for environmental groups against big oil companies in particular.

US oil giant Exxon had two board members replaced by representatives of the activist group Engine1 while 61% of Chevron shareholders voted in favour of a motion from Dutch environmental group Follow This.

Shell (LON:RDSB) also lost a court case in the Netherlands brought by green campaigners to force it to cut its carbon emissions by 45% by 2030.

Investment giant Blackrock, a key member in the Investment Association, voted its 6.7% stake in Exxon for Engine 1’s motion with UK firm Legal & General also reported to have sided with the environmentalist group.

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