Originally published on iigcc.org
- Sarasin & Partners, a Climate Action 100+ lead investor on CRH, has pre-declared votes AGAINST three audit resolutions following repeated failure to meet expectations over climate accounting.
- Climate Action 100+ has flagged the three resolutions to its signatories thereby dramatically increasing the spotlight on the company ahead of its AGM on 28 April.
- Six out of 14 Climate Action 100+ flagged shareholder proposals received majority votes at some of the world’s largest GHG emitters during the 2021 AGM season.
- First major campaign targeting removal of Audit Committee Chair or auditor.
Climate Action 100+, the world’s largest investor engagement initiative on climate change, has flagged the first-ever net zero accounting-related resolutions at FTSE 100, CRH plc (‘CRH’), ahead of its AGM on 28 April 2022.
The flagging escalates a campaign facilitated by IIGCC’s Net Zero Accounting Workstream to address the repeated failure of corporates to meet investor expectations over climate accounting.
The three resolutions – put forward by Natasha Landell-Mills at Sarasin & Partners as a lead investor team member – flagged by Climate Action 100+ are:
- Resolution #1: To review the Company’s affairs and consider the Company’s financial statements and the Reports of the Directors (including the Governance Appendix) and Auditors for the year ended 31 December 2021
- Resolution #6e: Reappointment of Audit Committee Chair (Shaun Kelly)
- Resolution #8: Continuation of Deloitte Ireland LLP as Auditors
Notice of Meeting available here.
Why are the resolutions being flagged?
Despite repeated requests from investors, including letters sent in November 2020 and December 2021 setting out clear expectations, CRH’s 2021 Financial statements fail to provide visibility on: 1) how material climate risks have been considered; or 2) how CRH’s own climate targets have been incorporated into assessments of assets, liabilities and profitability. In addition, there is no disclosure for what a 1.5C pathway might mean for CRH’s financial position.
The result is that investors are unable to ascertain whether CRH would be resilient to accelerating decarbonisation, despite its own ambition to be aligned with a 2050 net zero pathway.
The latest Climate Action 100+ Net Zero Company Benchmark assessment also showed that CRH failed to meet any of the criteria on the Climate Accounting and Audit alignment assessment.
Stephanie Pfeifer, IIGCC CEO and current vice-chair of the global Climate Action 100+ Steering Committee: “The importance of Paris-aligned accounts cannot be understated. Without such detail, particularly for companies in industries intrinsically linked with the long-term fallout of climate change, investors cannot know the true value of a company nor understand how future climate-related risks may materially impact their prospects. Without such visibility investors are being asked to take a considerable leap of faith.”
“The flagging of three CRH votes – the first-ever for net zero accounting related resolutions – puts the spotlight squarely on the company ahead of its AGM. While it is for individual investors to make the own voting decisions, this nonetheless sends a clear signal and could be a watershed moment in the campaign to hold Audit Committee Chairs and auditors to account.”
Natasha Landell-Mills, Partner and Head of Stewardship, Sarasin & Partners, said: “Despite a long-standing engagement by investors, CRH’s accounts have failed to provide visibility on how its financial position would be impacted by the global transition onto a 1.5C pathway. Shareholders clearly need to understand how its assets, liabilities and profitability could be resilient to, for instance, rising carbon taxes, requirements to capture hard to abate emissions, or other likely policies that will drive the sector towards carbon neutrality. Equally important, executives need to be aligned with achieving CRH’s stated goal of carbon neutrality by 2050. Put simply, capital deployment will only be aligned with a 1.5C pathway when the numbers are aligned with this pathway.”
IIGCC’s Investor Expectations for Paris-aligned Accounts, a copy of which were sent to CRH in November 2020 – here
Sarasin & Partners’ statement on CRH and the decision to vote AGAINST the three resolutions – here
Full analysis of CRH’s 2021 Financial Statements by the Climate Accounting & Audit Project – here
More information on Climate Action 100+ flagged votes for 2022 – here
The Climate Action 100+ initiative flags shareholder proposals and other votes for investors to take into consideration during proxy season. Climate Action 100+ does not require that investors support specific shareholder resolutions or other votes. Investor signatories vote for shareholder proposals in their individual capacity and not on behalf of the initiative.
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The Institutional Investors Group on Climate Change (IIGCC) is the European membership body for investor collaboration on climate change and the voice of investors taking action for a prosperous, low carbon future. IIGCC has more than 375 members, mainly pension funds and asset managers, across 23 countries, with over €51 trillion in assets under management.
IIGCC works to support and help define the public policies, investment practices and corporate behaviours that address the long-term risks and opportunities associated with climate change. For more information visit www.iigcc.org and @iigccnews.
About Climate Action 100+ flagging
The Climate Action 100+ initiative flags shareholder proposals and other votes for investors to take into consideration during proxy season.
While Climate Action 100+ does not take a formal position on shareholder voting, it recognises that shareholder proposals and other votes are a powerful signal and a useful engagement tool. To ensure that signatories have an opportunity to properly consider resolutions that are aligned with the goals of the initiative, Climate Action 100+ may flag on this page, as well as in other communications, shareholder or management proposed votes at a Climate Action 100+ focus company publicly supported, filed or co-filed by an investor signatory. Climate Action 100+ does not require that investors support specific shareholder resolutions or other votes. Investor signatories vote for shareholder proposals in their individual capacity and not on behalf of the initiative.