Appendix 2 – Examples of engagement undertaken during the year to 31 December 2024
LGIM: APA
What was the issue?
APA is Australia's largest energy infrastructure company. Since 2022, LGIM have been engaging with the company as part of its Climate Impact Pledge campaign. APA was selected as a 'dial mover' company due to its scale and influence across the energy sector, believing that the company’s actions could have a broader, positive impact beyond its direct corporate scope. In their engagement, APA was identified as lagging in meeting LGIM’s expectations regarding climate - related lobbying activities, which was highlighted in the company’s qualitative assessment. In early 2022, LGIM communicated its expectations for management proposed ‘Say on Climate’ votes, which would enable sharehol ders to influence corporate climate action. LGIM expects credible transition plans in line with the Paris Agreement, aiming to limit global warming to 1.5°C, including the disclosure of Scope 1, 2, and material Scope 3 emissions, as well as short, medium, and long-term GHG emissions reduction targets. When APA brought its climate transition plan to a vote, LGIM could not support it because it lacked Scope 3 targets. The company committed to finalizing these targets by 2025. Following the vote, LGIM engaged with APA to understand the challenges the company faced in meeting these expectations, building the relationship through continued dialogue. LGIM’s engagement with APA has been well received and they are happy that the company has taken the issue very seriously and acted to attempt to resolve the situation in a proactive and pragmatic manner. Following multiple discussions with investors, in early 2024, during a meeting with APA, the company confirmed that it would include a Scope 3 goal in the 2025 update of its Climate Transition Plan. They also presented their proposed pathway for reducing Scope 3 emissions. APA acknowledged that feedback from investors, including LGIM, who had voted against the original plan in 2022, played a significant role in their decision to commit to a Scope 3 target. This outcome underscores the effectiveness of LGIM’s engagement strategy, which aligns with its voting policy, to drive progress toward decarbonization. LGIM looks forward to continuing its engagement with APA as the company works toward its net- zero goals.
What did LGIM do?
What was the outcome?
Ruffer: ArcelorMittal
What was the issue?
ArcelorMittal, a global leader in steel production, faced significant scrutiny over health and safety practices, particularly following a fatal incident at a mine in Kazakhstan. Additionally, concerns have been raised over the company’s approach to decarbo nization and the effectiveness of its strategies in reducing carbon emissions. These issues prompted Ruffer to engage with the company on both fronts, including its response to the tragedy and its broader climate-related goals.
What did Ruffer do?
Ruffer’s engagement sought to address the following key points:
What was the outcome?
ArcelorMittal’s response to the fatal incident included offering financial support to the deceased’s family and assisting the government of Kazakhstan in its inves tigation. The company acknowledged that safety performance had worsened during the pandemic but claimed improvement outside the Commonwealth of Independent States. However, despite promises of an independent safety audit, the company has yet to appoint an external party to conduct this review, with no firm timeline beyond a vague suggestion of an update by the 2024 AGM. This is insufficient, and Ruffer expects more immediate and concrete action.
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UTC (UK) Pension Scheme | Statement of Investment Principles - Implementation Statement | 5 March 2025
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