The Local Authority Pension Fund Forum (LAPFF) and CCLA Investment Management have called on 76 FTSE 100 companies to produce climate transition plans that investors can vote on.

The two organisations, with the support of investors representing £1.6trn assets under management, wrote to companies that have not held a vote on their climate transition plans in the past three years to set out their expectations ahead of next year’s AGM season.

It recommended that companies outline their climate strategies within their transition plans and include material climate-related impacts in their financial statements because it enables shareholders to make informed investment and stewardship decisions.

Investors also need specific votes on such climate transition plans, as this allows shareholders to express their confidence in the transition plan through a dedicated resolution rather than it being grouped with variety of other resolutions on the ballot.

It noted that investors expect companies to set out credible transition plans with Paris-aligned targets and detailed strategies for achieving them. However, it’s not only investors that have set expectations, there are also best practices that companies should follow.

For example, emerging guidance, such as that from the Transition Plan Taskforce, recommends that companies should produce and update their plans every three years.

In addition, a fifth of FTSE 100 companies, excluding investment trusts, have already provided their investors with the opportunity to approve their climate plans, which is considered good practice.

LAPFF chair, Doug McMurdo, said: “Given the considerable climate-related risks that major companies face and the implications for long-term company success, we are encouraging boards to provide investors with the chance to support their climate transition strategies or raise specific concerns.

“Such votes provide a great opportunity for boards to engage with their shareholders and wider stakeholders to strengthen their strategies and gain investor backing for their transition plans.”

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