By Jo Mountford, Intern, ShareAction
As I’m sure you are aware, climate change is one of the most pressing issues currently facing the world. Its effects on our environment can already be seen in increased instances of flooding, drought and extreme weather conditions, and unless immediate action is taken it is predicted that the impacts will only get worse. The 2015 United Nations Climate Change Conference in Paris will be a key moment tackling climate change and its impacts, as it is hoped that by the end of the conference a binding international agreement on climate change, for all nations in the world, will have been reached. UN Secretary-General Ban Ki-Moon has highlighted the crucial role that private companies have to play in achieving this agreement and ensuring that finance to put it in to practice is available.
Many insurance companies are becoming concerned about the effects of climate change on their business, as the increasing incidences of extreme weather mean that they are having to pay out more and more in insurance claims. Climate change is an issue that will affect Prudential in particular as a large amount of its businesses is in Asia, which Prudential itself admits is “exposed to approximately 75% of the world’s natural disasters”. It is therefore very surprising that in 378 pages of Prudential’s 2013 Annual Report, there is not one mention of climate change. So, on Thursday 15th May, I went along to their AGM to ask exactly what plans they have to use their influence in the run up to Paris 2015 to ensure that a binding international agreement on climate change is reached.
After the usual presentation about how well the company is doing (including an assertion that they pay tax in all the countries they operate in, for those of you following our tax campaign), questions from shareholders began. Prudential were running a very organised AGM , where questions were pre-registered, so I already knew I would be up first and was ready and waiting in seat A1. I presented my question to the board, emphasising the risks of climate change to Prudential’s business and customers in Asia, and the need for private sector companies to support an international agreement. The answer came from the Chairman, who started off very positively by saying that Prudential recognises the need for “immediate action” on climate change. However, as he continued, the answer became far more disappointing. The Chairman stated that Prudential’s strategy is focussed on the 3Rs – Reuse, Reduce, Recycle (great, but we’ll need a little more than that as the basis of the international agreement to curb climate change), then said that they are signed up to the UN Principles for Responsible Investment (meaning they will take environmental issues in to account when investing, but no commitment to trying to influence the negotiations) and will draw the attention of their asset managers to the IPCC’s latest report (that’s a start, but will the managers take the IPCC’s findings in to account?).
I very much got the impression that Prudential’s board hadn’t properly listened to my question, and that the answer was a generic response they give to any question on climate change. It’s clear that Prudential has made no plans to use its influence in a positive way leading up to the Paris 2015 summit, which is very disappointing, considering the pressing need for action on climate change, and Prudential’s potential to be impacted by it. All I can hope is that in the next year they will consider my question and the risks that climate change poses, and will be able to give me a better answer on what they’re doing at their next AGM.
Thanks Jo! Fancy joining the AGM Army? Learn the ropes of shareholder activism and take your questions straight to company directors at Britain’s top companies: email Jo Beardsmore to find out about upcoming free training sessions.