Investors push FTSE 100 firms to vote on climate transition plans at 2025 AGMs

A group of more than 40 pension funds and asset managers have written a letter to FTSE 100 firms urging them to add a resolution to adopt a climate transition plan to their 2025 annual general meetings (AGMs).

The investors manage over £1.6 trillion of assets and include the Local Authority Pension Fund Forum, CCLA Investment Management, Achmea, Clear Skies Investment Management, Ecofi Investissements, Groupama Asset Management and Nordea Asset Management, among others.

They call on the two-thirds of FTSE 100 companies that have not yet done so to “put a climate transition plan resolution on [their] 2025 AGM agenda” – which they note is “fast becoming good practice”.

Climate transition plans: a key tool for investors

Climate transition plans are the main document investors are using to understand climate risk within their portfolios. Speaking to CSO Futures last May, Ira Poensgen, Secretariat Technical Lead at Transition Plan Taskforce explained: “"Transition plans are one of the really critical pieces of infrastructure that you need in order to be able to build more integrity into the transition finance market, because they not only tell you about the past performance of the firm, but also what its forward-looking plans are, which is exactly the information that you need to make a much more meaningful distinction between companies that are taking the steps necessary, and those that are maybe missing the opportunity.”

And yet, credible transition plans remain “very rare”, according to the latest research by the Transition Pathway Initiative, which notes that these should be detailed and actionable, as well as aligning business practices, capital expenditure and decarbonisation goals.

Updating transition plans every three years

For the letter signatories, “credible transition plans” should include Paris-aligned targets and detailed strategies for achieving those goals. 

They also expect companies to provide their shareholders a vote on their climate plans at least every three years, through a dedicated resolution.

“Specific transition plan votes enable shareholders to signal support for these decarbonisation strategies and any associated capital expenditure requirements. By having such a vote, shareholders can initially indicate their confidence in the transition plan through a dedicated resolution rather than it being directed to one of a variety of other resolutions on the ballot,” they write. 

The investors end the letter asking companies to provide clarification on their intention to include such a resolution in their next AGM by October 11, or explain the reasons why they do not plan to do so.