A new campaign by a group of investors is aiming to hold businesses to account for their environmental impacts, in a trend which could trickle down to businesses of all size.
Some 225 institutional investors from around the world are targeting the world’s largest greenhouse gas emitters, hoping to send an “unequivocal sign” that they will be held accountable.
The Climate Action 100+ initiative, as it is called, was launched recently in Paris and has the likes of Nestlé, BP, Rio Tinto and Wesfarmers firmly in its sights.
The initiative brings together a group of global institutional investors with more than USD $26.3 trillion in assets under management, who are calling on 100 of the world’s biggest polluters to “act swiftly to improve governance on climate change, curb emissions, and strengthen climate-related financial disclosures”.
Among the local investors to have signed up are AMP Capital, Australian Ethical Investment, Colonial First State Global Asset Management, Cbus, First State Super, HESTA, Janus Henderson Investors, Local Government Super, VicSuper and Australian Super.
Anne Simpson, investment director of sustainability at CalPERS, (one of the largest public US pension funds), is hoping the initiative could have significant trickle down effect.
“Moving 100 of the world’s largest corporate greenhouse gas emitters to align their business plans with the goals of the Paris Agreement will have considerable ripple effects,” she said.
“Our collaborative engagements with the largest emitters will spur actions across all sectors as companies work to avoid being vulnerable to climate risk and left behind.”
The launch of the initiative falls on the second anniversary of the Paris Agreement, which saw a number of nations pledge to limit global temperature increases to a maximum 2-degrees Celsius above pre-industrial levels.
“To support the full implementation of the Paris Agreement it is also vital that investors and universal owners across the mainstream investment community do more to ensure major corporate emitters move swiftly to address the risks and pursue the opportunities presented by climate change, providing greater disclosure on how they are aligning with the 2-degrees transition,” said Stephanie Maier, HSBC Global Asset Management’s director of responsible investment.
Investors are specifically calling on the 100 companies to:
1. “Implement a strong governance framework” which clearly state’s the board’s “accountability and oversight” of climate risk
2. “Take action to reduce greenhouse gas emissions across their value chain” as part of the Paris Agreement
3. “Provide enhanced corporate disclosure” to ensure that investors can assess the quality and strength of companies’ climate risk plans and procedures.”