Companies ‘to tackle climate change or be delisted’

LABOUR HAS set out plans for companies that fail to tackle climate change to be delisted from the London Stock Exchange.

In a speech to business leaders in Westminster, shadow chancellor John McDonnell outlined proposals to move away from a shareholder economy towards a stakeholder model, as well as reforming corporate governance, accountability and regulation.

Delisting occurs when a stock is removed from a stock exchange.

Companies already have to meet rules set by the London Stock Exchange and Financial Conduct Authority and Labour is proposing amending the Corporate Governance Code to put in place a minimum standard to listing relating to “evidence of necessary action being taken to tackle climate change”.

It comes after Mr McDonnell took aim at the super-rich, describing their wealth as “obscene”, as Labour unveiled research showing one in three UK billionaires have made donations to the Tory party. Mr McDonnell said: “It will be for, basically, those companies themselves to bring forward their proposals and plans – exactly what sort of proposals they’ll be, how effective they’ll be. And then during the listing process, they’ll be assessed about how successful they are either performing or how successful their plans will be.

“On that basis, just as with the rest of the code that there is, they’ll then be assessed and determined if they can be listed.”

Mr McDonnell also outlined plans for 10 per cent of company shares to be transferred to workers over a decade at a rate of one per cent a year. He added: “What we’re trying to promote is a stakeholder economy. Again, it is something we have been arguing for, for over three decades now. So the idea is, we’ll introduce legislation where companies hand over 1 per cent of their shares for 10 years into an employee-ownership scheme.”