Rentokil Initial is to donate all unclaimed dividends and untraceable shares to charity, creating a new good causes fund ‘Rentokil Initial Cares’. In its first year it will add £250,000 to this fund.
The company is also encouraging other companies to take this approach to ‘dormant funds’, estimating that there is between £500 million and £1 billion available across the FTSE100.
The sums available are of course significant. According to data published in Link Asset Services’ UK Dividend Monitor, the total value of dividends paid by UK companies was £32.3 billion in the third quarter of 2018 with the total amount paid by UK companies for the full year (including both regular and special dividends) on track to reach £100 billion.
A small percentage of those that become untraceable or unclaimed after 12 years could of course make a substantial difference to many charities, if they were made available rather than returned to the companies.
What usually happens to shares and dividends?
While the vast majority of dividends are claimed by shareholders, each year a small percentage of dividends remain unclaimed and a small number of shareholders are untraceable. In line with UK company law, these “dormant” funds can be returned to companies after twelve years.
This is the change Rentokil Initial is making, but choosing to donate these funds to charity.
The total value of unclaimed dividends and shares in the company currently stands at over £1m.
Will other companies adopt this approach?
Andy Ransom, Chief Executive of Rentokil Initial plc, explained the company’s approach, and emphasised how much more could be achieved if more companies followed its lead.
He said: “After trying our best to contact the relevant shareholders, we will now use the value of any unclaimed shares and unclaimed dividends to support good causes. But imagine this kind of impact multiplied a hundred times over – it could make a huge difference and I hope other companies will join us.
“Our new good causes fund – Rentokil Initial Cares – will support our colleagues’ own charitable efforts around the globe and good causes in line with our mission to Protect People and Enhance Lives. I would expect us to commit around £250,000 to good causes each year.”
Rentokil Initial’s partner charities
Although the company already supports many charities around the world, the focus for this new fund will be those which help to protect people and enhance lives.
- Malaria No More UK, with which it has been working since 2011.
- rainforest conservation charity Cool Earth. In 2018, the company protected c. 1,000 acres of rainforest in Papua New Guinea and in doing so preventing the release of carbon through deforestation to the equivalent of its 2017 emissions.
- Better Futures, Rentokil Initial’s own community health education programme – providing hygiene training to children and adults in the poorest communities in Asia.
Frank Field MP, co-founder of Cool Earth, said: “Using unclaimed dividends to address climate change is a beautifully simple idea and it is typical that Rentokil Initial thought of it first. A smart company, who are showing great leadership to deliver a global impact…
“Thanks to Rentokil’s ingenuity, the funding from unclaimed dividends will ensure some of the world’s most endangered forest are kept standing. I hope that where Rentokil leads other responsible companies will follow.”
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