Thirty-four investors managing more than $7 trillion in assets have warned 17 of Europe's most prominent companies that they could challenge board directors over their accounting of climate risks.
The move is the latest push by investors to pressure companies and their auditors, charging them with not moving fast enough to adapt to the transition to a low-carbon economy or being clear enough about the potential impacts.
In letters sent between December and February and seen by Reuters, the investors told the companies their accounts did not reflect the fallout from climate change on their assets and liabilities.
Landell-Mills said the latest annual reports would influence votes. Sarasin had decided to vote against the financial statement and auditor at Rio Tinto plc's RIO AGM.
She added she was pleased to see Shell plc SHEL include a 'sensitivity analysis' in the notes to its accounts, released after the letter had been sent, showing impairments could hit $27-$33 billion based on average prices from four 1.5-2C climate change scenarios.
Air Liquide AIQUY and Saint Gobain said they were liaising with the IIGCC, a European membership body for investors collaborating on climate change. They said climate risks were factored into their accounts.
Mercedes Benz Group DMLRY said it was in a "constant and constructive" dialogue with the investors and would update its sustainability strategy on April 11. Equinor ASA EQNR referred to its energy transition plan as being on a Paris-aligned pathway.
Glencore GLNCY declined to comment on the letter, but its 2021 annual report contains a sensitivity analysis. ThyssenKrupp TKAMY shared a letter sent to IIGCC member Rathbones Investment Management. It said it understood investors' need for more detailed information and was "currently examining how we may implement your inquiry."
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