A billionaire hedge fund manager and backer of Extinction Rebellion has warned he will begin taking action against companies that do not do enough to tackle the climate emergency.
Sir Christopher Hohn, founder of TCI Fund Management, which manages more than $28bn (£21bn) of assets, has sent letters to big companies in which it invests, including Google and Airbus.
TCI said it would “typically vote against all directors of companies which do not publicly disclose all of their emissions and do not have a credible plan for their reduction”. The fund manager warned it will consider selling its shares if climate change risks aren’t properly disclosed.
Among its conditions, TCI has asked all companies to report their total carbon emissions via CDP, an independent environmental consultancy.
Sir Christopher, whose wealth is estimated at £1.2bn, told the Financial Times: ““Investing in a company that doesn’t disclose its pollution is like investing in a company that doesn’t disclose its balance sheet. If governments won’t force disclosure, then investors can force it themselves.”
A company’s greenhouse gas emissions will have a material effect on its long-term profitability, sustainability and investor returns, TCI said.
“These risks include regulation, taxation, competitive disadvantage, brand impairment, financing, physical asset impairment and litigation.”
TCI’s move comes as world leaders meet in Madrid for the UN’s annual climate summit, and underlines the role that asset managers, banks and insurers could play a key role in combating the climate emergency.
A report published on Monday concluded that coal-fired power stations were “on the way to becoming uninsurable” as the number of insurers withdrawing cover for new fossil fuel projects more than doubled in a year. The Unfriend Coal Campaign found that 10 large insurers had announced plans to stop supplying cover for builders or operators of coal mines and plants.
Sir Christopher has donated millions of pounds of profits to charity via The Children’s Investment Fund Foundation, which he founded in 2002.
The foundation donated £150,000 to the Extinction Rebellion movement Sir Christopher also gave £50,000 of his own money.
On Tuesday, he took aim at other fund managers for failing to do enough on climate change. He accused BlackRock, the world’s largest fund manager, of being “full of greenwash” because it touts its environmental credentials but does not require companies it invests in to make disclosures about their emissions. “Asset owners should fire asset managers that do not require such disclosure,” he said.
BlackRock boss Larry Fink writes to chief executives each year about how they should run their companies, including tackling climate change, but his own firm is one of the world’s largest investors in fossil fuels.
A report last week from InfluenceMap named BlackRock – which manages $6.5 trillion of assets – as the worst fund manager for voting in favour of climate-related shareholder resolutions.
A spokesperson for Blackrock said: “We put a priority on engaging with a company on addressing climate-related issues even in the absence of shareholder proposals.”