Investors With $47 Trillion in Assets Take Aim at Big Polluters

(Bloomberg) --

Climate Action 100+, a group of more than 500 investment firms that together manage over $47 trillion in assets, called on some of the world’s biggest polluters to be more aggressive in reducing their greenhouse gas emissions and introduce plans to cut them as close to zero as possible.

The group’s steering committee asked 160 companies to commit to achieving net-zero emissions by 2050 or sooner, including their so-called scope 3 emissions, which are produced by customers using their products. They also asked the companies, which include the likes of Exxon Mobil Corp. and Rio Tinto Group, to set targets in the medium term and explain how they will achieve their goals.

While 50 of the 160 companies have already set emission goals — for example, BP Plc earlier this year promised to transform itself into a net-zero emissions company by 2050 — there’s great variety in the types of emissions covered and the level of ambition among fossil fuel companies, Climate Action said Monday. With the catastrophic consequences of climate change on display from California to Australia, a growing number of investors are pressing companies to do more.

“We welcome the progress made so far but we really want to see further progress: when you’ve made a commitment we want to see the details of how that is going to be implemented, and when you haven’t made a commitment yet we want to see that as soon as possible,” said Stephanie Pfeifer, chief executive officer of the Institutional Investors Group on Climate Change and member of Climate Action’s steering committee. “There’s an urgency and seriousness with which investors are looking for progress.”

The investor group, formed in 2017 to nudge the world’s largest corporate greenhouse gas emitters to take action, also announced a net-zero company benchmark. When released next year, it will provide investors with a detailed overview of which companies are most prepared for the transition to a lower carbon world and which are dragging their feet.

The data could be used to inform investor engagements with companies and could even prompt shareholder resolutions or voting action, said, Stephanie Maier, director of responsible investment at HSBC Global Asset Management, who is also on Climate Action’s steering group.

“This is a really important milestone in what is and has been an incredibly effective initiative,” Maier said. “There’s lots more to do, but this gives us the structure to move forward.”

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