Some of the world’s largest institutional investors are throwing their weight around on behalf of mother earth.
A group called Climate Action 100+, which is comprised of 225 institutional investors with more than US$26 trillion in assets under management, has launched a program to engage with the world’s largest corporate greenhouse gas emitters, encouraging the companies to step up their actions on climate change. The program was launched on Tuesday at an international investment summit in Paris to mark the second anniversary of the Paris Agreement.
Read: Institutional investors sign declaration for climate change accountability
The group includes a number of Canadian institutional investors, including:
- The British Columbia Investment Management Corp.;
- The British Columbia Municipal Pension Board of Trustees;
- The Caisse de depot et placement du Québec;
- The Nova Scotia Pension Services Corp.;
- The OPSEU Pension Trust; and
- The University of Toronto Asset Management Corp. on behalf of the University of Toronto.
Some international names of note include the AustralianSuper, Aviva Investors, the California Public Employees’ Retirement System, the New York City Pension Funds, Schroders and UBS Asset Management.
The initial list of 100 companies that the group is targeting are those with the most significant combined direct and indirect emissions associated with the use of their products. They cover a variety of sectors and include Berkshire Hathaway Inc., Caterpillar Inc.,PepsiCo Inc. and the Volvo Group.
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“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,” said Anne Simpson, investment director of sustainability at CalPERS, in a news release. “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.”
An invitation to sign on to the initiative was first issued in September 2017. “In a few short months a substantial community of institutional investors have coalesced around this initiative because they want to send an unequivocal signal — directly to companies — that they will be holding them accountable in order to secure nothing less than bold corporate action to improve governance, curb emissions and increase disclosure to swiftly address the greatest challenge of our time,” said Andrew Gray, senior manager of investments governance at the AustralianSuper.
The investors will ask companies to:
- Implement a strong governance framework that articulates the board’s accountability and oversight of climate change risk;
- Take action to reduce greenhouse gas emissions across their value chain, consistent with the Paris Agreement’s goal of limiting global average temperature increases; and
- Provide enhanced corporate disclosure in line with the final recommendations of the Financial Stability Board’s task force on climate-related financial disclosures to enable investors to assess the robustness of companies’ business plans against a range of climate scenarios, including improved investment decision-making.
Read: Canadian pensions support proposals on climate-related financial disclosures