World’s Biggest Investors Tell 161 Corporate Polluters To Clean Up Their Act

Climate Action 100+, an initiative backed by over 500 of the world’s biggest institutional investors that together manage more than US$47 trillion in assets, has written to 161 big-emitting companies demanding them to set climate targets. It is the latest step the campaign has taken to force businesses to do more to help slash carbon emissions to meet the goals set out by the Paris Agreement. 

161 fossil fuel, mining, transportation and other polluting companies have officially been put on notice in the latest campaign by Climate Action 100+, a group of 518 global investors who collectively manage more than US$47 trillion in assets, including BlackRock and the asset management arms of UBS and J.P. Morgan. Together, the 161 companies targeted are responsible for nearly 80% of global industrial greenhouse gas emissions. 

In the letter, the campaign called on these companies to set 30 climate measures and defined goals against which they will be analysed for a report to be published next year. They will be reviewed by the Climate Action Steering Committee upon several indicators, including whether they have set out strategies to achieve net-zero emissions by 2050 and to reduce Scope 3 emissions coming from customers who use their products. 

Read: 20 fossil fuel firms generate one third of global emissions

Listed on the corporate polluter group are key fossil fuel and mining companies including Exxon Mobil, PetroChina, BP, Royal Dutch Shell, Rio Tinto, BlueScope Steel and Australian energy giants AGL, Santos, Woodside and Origin. Mining behemoth BHP is also included in the group, who has recently promised to reduce operational emissions by 30% after pressure from activist shareholders. 

Companies across all sectors need to take more ambitious action to ensure otherwise devastating impacts of climate change are avoided while they still can be.

Stephanie Pfeifer, CEO of Institutional Investors Group on Climate Change

The letter recognised some incremental steps forward that some companies have made, but emphasised the need for strengthened action in order to actually limit temperature rise to 1.5 degrees celsius above pre-industrial levels in order to prevent “the devastating impacts of otherwise avoidable climate change”. 

Outcomes from the report that will be released next year will inform investors’ strategies, especially for those companies that are “unresponsive or poorly performing” on climate action measures. 

“Companies across all sectors need to take more ambitious action to ensure otherwise devastating impacts of climate change are avoided while they still can be,” said Stephanie Pfeifer, CEO of Institutional Investors Group on Climate Change and Climate Action 100+ Steering Committee member. 

Asian investors have forged stronger relationships with companies on emissions performance through Climate Action 100+ engagement, leading to a number of increasingly strong outcomes.

Rebecca Mikula-Wight, Executive Director of the Asia Investor Group on Climate Change

Rebecca Mikula-Wight, the executive director of the Asia Investor Group on Climate Change and member of the Climate Action 100+ Steering Committee added that there is a growing focus amongst Asian investors on companies that prioritise sustainability and factor in environmental and climate risks. 

“Asian investors have forged stronger relationships with companies on emissions performance through Climate Action 100+ engagement, leading to a number of increasingly strong outcomes,” she said. 

Recent research notes from major banks have backed this trend up, with HSBC recently finding that climate-forward companies have outperformed the broader stock market and UBS recording a doubling in assets in sustainable investments since the pandemic began in early 2020, with the majority of investments coming from Asia. 

This isn’t the first time that global investors have doubled down on companies who are not taking active climate measures. Earlier this year, BlackRock, the world’s largest asset manager who joined the Climate Action 100+ pact after sustained pressure, said that it will change its investment stewardship strategy. In its review, BlackRock punished 53 companies, including Chevron, ExxonMobil and Volvo, for failing to adhere to climate demands from investors. 

Lead image courtesy of ExxonMobil.