CRH PLC | Review the Company’s affairs and consider the Company’s financial statements and the Reports of the Directors (including the Governance Appendix) and Auditors

Status
97.64% votes in favour
AGM date
Proposal number
1
Resolution details
Company ticker
CRH:LN
Lead filer
Sarasin & Partners LLP
Resolution ask
Adopt or amend a policy
ESG theme
  • Environment
ESG sub-theme
  • Net Zero / Paris aligned
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Materials
Company HQ country
Ireland
Supporting materials
  • crh_2022_climate_action_100_flagging_memo_final.pdf Download
Resolved clause
Despite repeated requests from investors (see Background below), CRH’s 2021 Financial
statements fail to provide visibility on 1) how material climate risks have been considered; or 2)
how CRH’s own climate targets have been incorporated into assessments of assets, liabilities and
profitability. In addition, there is no disclosure for what a 1.5C pathway might mean for CRH’s
financial position.
• The result is that investors are unable to ascertain whether CRH would be resilient to accelerating
decarbonisation, despite its own ambition to be aligned with a 2050 net zero pathway.
• Moreover, where the accounts are not properly incorporating material climate risks they will
drive a misallocation of capital into excessively carbon-intensive activities, thereby potentially
destroying shareholder value. This is clearly also harmful for the planet
Whereas clause
• In November 2020, a large group of investors wrote to CRH’s Audit Committee Chair setting
out detailed investor expectations for net-zero aligned accounting and audit disclosures. At a
high level, the investors were seeking visibility for how 1) expected material climate risks, 2)
CRH’s own climate targets and 3) a transition onto a 1.5C pathway would impact CRH’s
financial position.
• Whereas 1 and 2 above should be incorporated into the financial statements, 3 could be
provided through sensitivity analysis in the Notes to the accounts.
• Further detail on the investor expectations is provided in this IIGCC briefing paper: Investor
Expectations for Paris-aligned Accounts – IIGCC.
• In CRH’s 2020 Financial Statements (published Spring 2021), there was no reference to
climate risks. The auditor also only made passing reference to how they considered climate
factors.
• A follow up investor letter was sent in December 2021, repeating the requests, and pointing
to updated regulatory and standard setter statements supporting the investor requests.
• The UK’s Financial Reporting Council and European Securities Market Authority have
identified the inclusion of material climate risks into financial statements as a supervisory
priority for 20221
.
• The accounting standard setter (IASB) and the audit standard setter (IAASB) have both
published guidance in 2020 underlining why material climate risks must be considered under
existing standards2
.
• CRH’s 2021 Annual Report & Accounts have once again not met investor expectations
regarding providing visibility for how its critical accounting assumptions have incorporated
material climate risks, or how its own commitment to carbon net neutrality in 2050 was
considered as part of the accounting or audit process. There is no quantitative disclosure for
what a 1.5C pathway might mean for its financial position.
1
European enforcers target COVID-19 and climate-related disclosures (europa.eu); News I Financial Reporting Council
(frc.org.uk)
2
See: IFRS - Educational material: the effects of climate-related matters on financial statements prepared applying IFRS
Standards, IAASB Issues Staff Audit Practice Alert on Climate-Related Risks | IFAC, Summary-FINAL.pdf (frc.org.uk)
3
• The detailed assessment of its 2021 Financial Statements is provided below under ‘Rationale
details’.
Supporting statement
CRH’s 2021 Annual Report & Accounts has not provided visibility for how its critical accounting
assumptions have incorporated material climate risks, or how its own commitment to carbon net
neutrality in 2050 was considered as part of the accounting or audit process. There is no quantitative
disclosure for what a 1.5C pathway might mean for its financial position.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For

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