UK’s largest asset manager raises concern over Ireland’s climate targets

Legal & General Investment Management (LGIM), one of the world’s largest money managers, has raised concern about Ireland’s efforts to tackle climate change amid suggestions the State will fail to meet upcoming emissions targets.

LGIM, which manages assets worth €1.6 trillion, has become one of the most outspoken financial institutions on climate change.

Its latest Climate Impact Pledge report, which covers around 1,000 companies, shows it voted against the re-election of chairpersons at 80 companies this year for failing to meet its minimum climate change standards while placing a further 14 companies, including two with operations in Ireland, on an investment exclusion list.

The UK asset manager said while the Irish Government had announced “new, more ambitious” targets aimed at reducing emissions by 51 per cent by 2030, it was concerned at recent remarks by the country’s Environmental Protection Agency (EPA), suggesting the State would fail to meet its emissions reduction targets unless the pace of action on transport and agriculture is stepped up significantly.

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Based on its latest emissions projections out to 2040, the EPA said Ireland would find it difficult to meet its carbon budgets over the next decade due to “a significant gap” between them and projected emissions, which is widest in the agriculture and transport sectors.

Total greenhouse gas emissions are estimated to have increased by 6 per cent last year, but the Government’s new five-yearly carbon budget up to 2025 requires emissions to reduce by 4.8 per cent on average each year.

In its report, LGIM said it had voted against chairpersons at 80 companies over climate change issues, with firms in the oil and gas, banking, mining and property sectors among the most targeted. This was down by a third on the previous year, reflecting what it said was the impact of engagement.

LGIM has also kept 14 companies on its so-called exclusion list, including US food conglomerate Sysco and US insurance firm MetLife, both of which have significant operations in Ireland.

Sysco remains divested, it said, due to “a lack of ambitious emissions reduction targets” and its progress on net zero commitment not being aligned with the pace required to keep global warming with a 1.5 degree trajectory. Sysco is one of the largest food businesses in Ireland with a team of over 1,300. Originally Pallas Foods, owned by the Geary family, it was sold to Sysco in 2019.

MetLife, which employs more than 300 people here, remains divested for its thermal coal policy and for having no scope 3 emissions disclosure, LGIM said.