Legal & General to sell Glencore stake over thermal coal concerns; UK retail sales go into reverse in June– business live | Business

Just in: UK retail sales have fallen faster than expected this month, as the sector went into reverse after May’s modest recovery.

The CBI’s latest healthcheck on UK retailers, just released, found that retail sales volumes fell in the year to June, following a modest recovery in May.

The CBI’s retail sales volume gauge fell to -24% this month, from +8% in May, showing that a majority of retailers reported a drop in volumes compared to the previous year.

UK retailers also expect sales to be weaker than usual next month, following a drop in orders.

The CBI explains:

• Sales were reported to be well below “average” for the time of year (-39% from +2% in May). Sales volumes are expected to remain below seasonal norms in July, albeit to a lesser extent (-29%).

• Orders placed upon suppliers fell moderately in the year to June at a broadly similar pace to last month (-14% from -11% in May). Retailers expect the cutback in orders to continue next month (-16%).

Alpesh Paleja, CBI interim deputy chief economist, says:

“Last month’s nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month. Unseasonably cold weather in June may have played a role, but it’s notable that internet retail sales fell sharply in our survey, too.

Consumer fundamentals are improving, with inflation now at the Bank of England’s 2% target and real incomes rising. But it’s clear that households are still struggling with the legacies of the cost-of-living crisis, with the level of prices still historically high in some areas.

With consumer demand still on shaky ground, an incoming government can help business by ensuring that the UK is the most attractive place to start, grow and run a business. This will require bold action such as delivering a holistic cross-economy solution to the UK’s overly complex business rates system, which is a particular burden for retailers. This would help to alleviate the burden of higher costs.”

Legal & General Investment Management has also decided to divest its stake in US retail chain TJX, the parent company of UK chain TK Maxx.

LGIM says TJX, like Glencore, failed to sufficiently address concerns raised in recent years about its environmental impact.

LGIM says it concerned over TJX’s lack of a zero-deforestation policy and insufficient disclosure of “material Scope 3 emissions” that fail to account for its material value chains’ emissions.

Today’s decisions will raise the number of divestments through LGIM’s Climate Impact Pledge to 16.

LGIM says this “stewardship” of its investments is a critical lever in the global push to reach net zero.

Stephen Beer, senior manager sustainability and responsible investment at Legal & General Investment Management, adds:

We find that as time progresses, our conversations with companies can become harder-edged; not necessarily more difficult, but more focused. We use tools such as voting and divestment to encourage companies to meet our expectations on net-zero, while also sending a clear signal to the wider market. While divestment is one of the many stewardship tools we use as a mechanism for driving change, we see it as a last resort and by no means the last stage of engagement. Our engagement will continue, and where companies make sufficient progress, they will be reinstated.

Ultimately, whilst we are focused on a net-zero objective, there is no one size fits all approach; our engagement approach is nuanced, it is about listening to companies and understanding the challenges they face, as well as the potential opportunities ahead, in accelerating the pace of the transition at a global scale.”