Six European pension funds, including the Church of England Pensions Board, have started legal proceedings against the German car manufacturer Volkswagen for refusing to answer shareholder questions on allegations of corporate climate lobbying.
VW stands accused of lobbying against stricter climate rules through its membership of various automotive and business associations.
The funds claim the potential contradiction this creates with the auto-giant’s publically stated climate ambitions exposes the company to reputational and operational damage and therefore puts the security of their investments in question.
While the case is brought on a point of German company law of whether shareholders have a right to put an item on the agenda of an annual meeting, the outcome of the case could have far reaching consequences for corporate accountability and transparency for shareholders across Europe.
This is the first time investors have started European litigation on a climate-related matter and it will be interesting to see if following the outcome of this case more pension funds will be willing to work together, potentially across borders, to litigate for transparency on environmental matters.