Several of Ireland’s leading plcs have been reprimanded for failing to adequately address environmental, social and governance (ESG) issues.
In its latest "active ownership" report, Legal & General Investment Management (LGIM), one of the world's largest asset managers and holders of corporate stock, said it voted against the boards of Kingspan, Medtronic and Glanbia on issues of independence, diversity and remuneration last year while engaging with Paddy Power Betfair owner Flutter, Bank of Ireland and AIB on their climate policies.
The UK money manager has been using its financial clout – it has €1.4 trillion in assets – to push for change at a corporate level in a number of areas, most notably climate change.
It took insulation manufactuer Kingspan to task over a lack independence on the board and for failing to meeting minimum gender diversity standards, voting against the board on several resolutions at last year’s annual general meeting in May.
It said it had also been engaging with the company on issues around cladding and the Grenfell Tower inquiry in the UK. Some of the company’s products were used on the London tower block, which caught fire in June 2017, killing 72 people.
Stock awards
LGIM also took issue with medical device manufacturer Medtronic over pay, voting against the company’s remuneration report in 2020 which granted executive directors special one-off stock awards to compensate for no bonus being paid out.
It also voted against a Glanbia resolution on diversity while taking Flutter to task over its emissions disclosure.
The UK asset manager – which has an operation here employing 24 people – has in recent years become one of the most outspoken financial institutions on climate change.
It said Bank of Ireland and AIB had "room for potential improvement in their environmental policy, credit and loan standards and the targets for their emissions" and were ranked about average among their peers when it came to tackling climate change issues.
Fossil fuels
LGIM’s report reveals it voted against the re-election of 4,700 company directors globally in 2020 due to governance concerns.
It said climate change was the top engagement topic with companies last year, accounting for over 400 engagements, more than remuneration, diversity or strategy.
The money manager has been criticised for continuing to hold stakes in some of the biggest fossil fuel companies in the world, but it insists it has a better chance of instigating change from inside.
LGIM has more recently begun to push big tech on privacy and content-related issues. In December 2020, Facebook – on foot of pressure from LGIM and others – committed to a review of content-related risks that violate its policies .
Last week the UK investment house said it is unlikely to participate in food delivery firm Deliveroo’s upcoming initial public offering (IPO) due to the enhanced voting rights held by founder Will Shu.
‘All stakeholders’
Commenting on this year's report, Sacha Sadan, director of investment stewardship at LGIM, said: "The Covid-19 pandemic brought into sharp focus the need to take action now to address the threats facing our societies, our message to companies has been clear – focus on all stakeholders, not just shareholders.
“Climate change continued to be a central topic of engagement, as despite drastic lockdown measures globally, the world is still a long way from reaching net-zero carbon emissions,” he added.
