Fund Management

Prominent Activist Investor Demands Urgent Action On Climate Change

Amanda Cheesley, Deputy Editor, London, 23 May 2022

articleimage

Chris Hohn, founder and portfolio manager of TCI Fund Management Limited, outlined how to combat climate change at the London Value Investor Conference this month.

Activist investor Chris Hohn, famous for his tussles with firms over the past two decades, called for urgent action to tackle climate change at the London Value Investor Conference on Thursday, saying credible climate action plans and long-term targets are vital.

“We are running out of time on climate change,” Hohn, founder and portfolio manager of TCI Fund Management Limited said. Drought, famine, heatwaves, forest fires are increasing rapidly whilst emissions across companies are rising, he warned.

“Perhaps even more catastrophic climate events are needed to force companies to act,” he added.

“All firms need a credible climate action plan, with long-term targets. Emission disclosure alone is inadequate,” he explained. “Private companies need to step up. Regulation is needed on private firms, not just on public ones. A voluntary regime will never work,” he said.

He believes that a wave of litigation is coming for companies who take inadequate action on climate change. He cited the ground-breaking judgement by the Hague District Court last May ordering Shell to reduce its global net carbon emissions by 45 per cent by 2030, compared with 2019 levels, which it is appealing against.

“With climate change being a long-term threat to investment, industry needs to drive regulation,” he added.  “We need industry-led regulation to make it more effective. Governments need to assist industry too through taxes and subsidies,” he said.

He believes this will work in a company’s interests, saying that “greener” firms will have a competitive advantage over higher polluting ones. Linked to this, he cited the benefits of investing in the US railway industry.  

Hohn established The Children’s Investment Fund Management (TCI), a London-based hedge fund in 2003. It now has $27.1 billion of assets under management as of 30 June 2019 and is often listed among the world’s best-performing funds. A controversial figure, in 2007, after acquiring 1 per cent of the shares of major Dutch bank ABN AMRO, Hohn's TCI led an attack demanding that the bank split up or sell to the highest bidder to produce shareholder value.The lender was ultimately split and sold to Royal Bank of Scotland, Fortis, and Banco Santander which was a major contributing factor in the downfall of both RBS and Fortis. 

Hohn, worth an estimated $5 billion according to the Forbes billionaires list in 2020, is known for giving more than $4.5 billion to The Children’s Investment Fund Foundation which focuses on improving the lives of children living in poverty in sub-Saharan Africa and India. Key areas of focus include climate change, family planning, malnutrition, neglected tropical diseases and anti-human trafficking work. He is also a prolific contributor to the cause of combatting climate change.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes