AIG's climate policy causes one investor to jump ship

Legal & General will divest from AIG and three other companies due to their insufficient actions to address climate change risks.

Legal & General Investment Management announced that it will divest from four companies, including AIG, due to unsatisfactory climate policies. (Photo: Michael Nagle/Bloomberg)

Legal & General Investment Management (LGIM), one of Europe’s largest asset managers, announced that it will divest its holdings from four companies due to their ”insufficient action to address the risks posed by climate change.”

AIG is among those companies impacted.

In a June 15 press release, LGIM said AIG, as well as the Commercial Bank of China, PPL Corporation and China Mengniu Dairy, failed to issue satisfactory responses to engagement and/or breaches of ‘red lines’ around coal involvement, carbon disclosures or deforestation. These companies join several other firms on LGIM’s exclusion list, which currently includes MetLife and identifies the companies that have not yet taken substantive actions required for reinstatement.

“Climate change is one of the most critical sustainability issues we face, and we fully support efforts to align the global financial system with a pathway well below 2°C,” said Michelle Scrimgeour, CEO of LGIM, in a statement. “We have made a strong commitment to push forward this agenda across the different parts of the investment chain, from our engagement with companies and policymakers through to our own investment process and LGIM’s own commitment to net zero.”

Last year, the asset manager announced the expansion of its Climate Impact Pledge that includes efforts to engage with 58 companies influential in their sectors but not yet embracing the transition to net-zero carbon emissions, LGIM explained.

In 2021, 130 companies were subject to voting sanctions for falling short of LGIM’s minimum standards, with the banking, insurance, real estate, technology and telecoms sectors being the most highly sanctioned.

Upon the news of LGIM’s divestiture from AIG, Hannah Saggau, climate campaign coordinator at nonprofit Public Citizen, said: “AIG has no commitments to end its underwriting and investments in fossil fuels and has insured devastating fossil fuel infrastructure like the Trans Mountain tar sands pipeline, which violates Indigenous rights… AIG only stands to lose if it fails to act on climate.”

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