Through their equity and fixed-income holdings, investors have a powerful opportunity to effect behaviour change, diversification and transformation among the world’s most carbon-intensive companies. Climate Action 100+ is made up of more than 570 investors managing over $54 trillion in assets. Signatories are engaging companies in three areas: improving climate change governance, cutting emissions, and strengthening climate-related financial disclosures.
Climate Action 100+ signatories are using their voice as institutional share owners to pursue three goals:
- Implement a strong governance framework that articulates boards accountability for climate change risk.
- Set a series of emissions reduction targets consistent with the Paris Agreement goal of 1.5C of average global warming.
- Provide disclosure in line with the Task Force on Climate-related Financial Disclosures.
To support the engagement activities undertaken by signatories, Climate Action 100+ has developed the Net-Zero Company Benchmark. This tool assesses the performance of focus companies against the initiative’s three high-level goals: emissions reduction, governance, and disclosure. The benchmark helps investor signatories evaluate company ambition and action in tackling climate change.
The Benchmark draws on distinct analytical methodologies and data-sets, to provide investors and other stakeholders with a robust tool to facilitate focus company engagement and action.
Climate Action 100+ has implemented an engagement process undertaken by investors.
Signatories have been organised into engagement teams to meet with each of the 167 companies that are the focus of the initiative. Before meeting with company executives and board members, engagement teams discuss progress at the company, or lack of progress, and the appropriate strategy for convincing the company to transition to a low-carbon platform.
Lead investors and those engaging companies individually (outside of a team), must disclose through a bi-annual survey their engagement plans and priorities over the coming 12 months to ensure strong and concerted action.
If company meetings fail to produce results, engagement teams consider a range of alternatives:
- Conducting investor roundtables
- Asking a question at a company earnings call or Annual General Meeting (AGM)
- Making a statement at a company AGM
- Writing a public letter to the company
- Supporting shareholder resolutions on climate change risks and opportunities
- Voting for the removal of directors who have failed in their accountability of climate change risk
- Voting against reports, accounts and company led resolutions
- Making joint statements with the company
- Aligning emissions: 52% of the world’s largest GHG emitters are now committed to achieve net zero across all or some of their emissions footprint
- Climate governance: 87% of companies now have a board level committee or have nominated an individual director to hold oversight of the climate change strategy
- TCFD reporting: 82% of world’s largest GHG emitters are now committed to or already have produced a TCFD report
The initiative is led by its participating investors who determine the focus companies they wish to engage, the engagement strategy pursued with each and update the initiative on progress. The engagement of investors is assisted by five investor networks from different parts of the world: the Asia Investor Group on Climate Change (AIGCC), Ceres, the Investors Group on Climate Change (IGCC), the Institutional Investor Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI).
The initiative is overseen by a global Steering Committee comprising investor representatives and the heads of the five supporting investing networks. The initiative also receives advice from a Technical Advisory Group and an Asia Advisory Group.
For more information on the governance of Climate Action 100+: www.climateaction100.org