One of the largest building material companies in the world is now facing a shareholder rebellion backed by Climate Action 100+ (CA100+), possibly the largest international climate action-driven investors’ group.
Shareholders of Ireland’s CRH plc affiliated with CA100+ have written to the company and threatened action if it failed to show the impact of transitioning to low-carbon methodologies would affect their investments. CRH was one of seventeen companies to whom warnings regarding shareholder opposition were issued if they did not show how climate risk factored into their operations.
In a statement issued on Monday, April 11th, CA100+ declared that it flagged the issue for the attention of its members who, collectively, manage nearly $68 trillion in assets. However, the organization made it clear that it was not forcing its members to vote in a particular way.
Rebellion with a Cause
The CA100+ action follows closely on a recent decision made by one of its member-companies, Sarasin & Partners. As the lead CA100+ investor working with CRH, the investment firm declared that it would vote against the company’s current audit committee chair and auditor, as well as its corporate accounts.
According to Natasha Landell-Mills, Sarasin & Partners’ head of stewardship, CRH’s accounts failed to provide visible proof on how its financial standing would be affected by the worldwide push towards a low-carbon / zero-carbon economy. Landell-Mills referred to the ongoing effort to halt global warming, capping the rise in temperatures at 1.5 degrees Celsius above the pre-industrial average.
She went on to say that it was imperative for investors to have a clear understanding of how CRH assets, liabilities, and the company’s overall profitability stood to be affected by any policy changes regarding environmental taxes and the looming possibility of companies being required to deal with emissions that are difficult to abate.
A Pivotal Moment
The way by which the three CRH votes were flagged is actually a first when it comes to corporate resolutions regarding net zero accounting. At the same time, it actually casts the spotlight on the company – and not necessarily in a good way – well ahead of its annual general meeting (AGM) which is slated for April 28, 2022.
For CA100+ steering committee vice-chairperson Stephanie Pfeifer, the shareholder rebellion is a watershed moment when it comes to environmental accountability on a corporate level. As she puts it, while individual investors can make their own decisions with regard to voting, this call for accountability may well change the game when it comes to holding audit committee chairs and company auditors to task with regard to the impact of climate change on corporate investments.