A future UK Labour government would delist companies from the London Stock Exchange unless they do enough to tackle climate change, John McDonnell, the shadow chancellor of the exchequer, has said.
The proposal is part of a broader plan by the opposition party to force UK-listed companies to do more to tackle what the party terms the “climate emergency” facing the planet and help a transition towards a net zero carbon emissions economy.
That would involve “weeding out those that are not taking it seriously”, Mr McDonnell said in an interview with the Guardian.
“We’ve got to signal now that we’re being serious about tackling climate change. And we’re going to use every lever of government we possibly can to enable that to happen.”
One senior business figure said Mr McDonnell was “asking the right questions”. But he argued that Labour should view business as part of the solution, not the enemy. “This is a hugely important challenge and business, the government, the public and civil society as a whole will have to work together to tackle it effectively,” he said
British officials have been working for some time on proposals that would oblige companies to disclose more about their climate change plans in annual reports. But the Labour idea goes far further.
Mr McDonnell has already put together the most radical economic platform of a big British political party for decades, including widescale nationalisations, higher taxes on companies and the gradual transfer of 10 per cent of shares in all big corporations to their staff.
The shadow chancellor said that as a backbench MP some years ago, he had proposed that human rights, trade union rights and environmental policy should be among the criteria for a company to list on the LSE.
“We’re now going to discuss how we can insert tackling climate change as one of the criteria for listing on the London stock market,” he said. Asked whether a Labour government would de-list companies already on the exchange if they did not have climate change plans, Mr McDonnell replied: “Yes”.
“It’s not about threatening or penalising, it’s saying here’s the steps we need to take to save the planet, it’s as simple as that,” he said.
A Labour spokesman confirmed the party’s plans on delisting but would not comment on the details of how the plan could work in practice. The LSE declined to comment.
Last year Mr McDonnell called for mining group Vedanta to be delisted from the LSE after police shot dead 13 people protesting against the company’s expansion plans in the south Indian town of Tuticorin.
He said such a move would “prevent further reputational damage to London’s financial markets from this rogue corporation”. Vedanta has said it is committed to complying with the highest standards of sustainability and environmental and corporate governance.
Mr McDonnell made his latest proposal as debate intensifies within Labour over environmental policy, with some activists pushing the party to adopt much tougher targets.
A group called Labour for a Green New Deal wants it to back a policy of zero net greenhouse gas emissions by 2030 — 20 years earlier than the advice from the official Committee on Climate Change.
But some big unions argue that such a plan would cost the jobs of thousands of members in heavy industry and in gas and coal-fired power stations.
Mr McDonnell held talks last month with members of Extinction Rebellion, the activist group that staged recent protests across London, including the Square Mile.
He has previously said that the Bank of England should be given a climate change target as part of its wider remit.
Mark Carney, governor of the Bank, has said the bank would include in its 2019-20 annual report an assessment of how it managed climate-related financial risks.
Additional reporting by Patrick Jenkins
