The Pensions and Lifetime Savings Association recommended that pension funds actively vote at annual general meetings of companies they invest in as part of efforts to eliminate business practices that foster climate change risks, the U.K. pension association said in an update published Thursday.
The 2018 corporate governance policy and voting code update added a set of guidelines for asset owners on exercising investor rights in opposition to resolutions at annual meetings, including issues related to executive remuneration, re-election of directors and appointment of auditors.
PLSA said in its guidelines that where companies failed to provide a detailed risk assessment and response to climate change impact on their business, pension funds should not support board chair re-elections.
"Companies that want to thrive over the long term must ensure their business practices are consistent with international agreements to limit global temperature increases. We are therefore advising our members to use their AGM votes to influence those companies that fail to recognize this reality," said Luke Hildyard, stewardship and corporate governance policy lead at PLSA, in a news release.