The Focus List of Companies
Investors who have signed on to Climate Action 100+ will initially focus their engagement on 100 of the world’s largest corporate greenhouse gas emitters. The initial focus list of companies includes but is not limited to those within the oil and gas, electric power and transportation sectors. It has been developed using CDP data on the companies’ combined direct and indirect (scope 1, 2 and 3) emissions, including emissions associated with the use of their products.
As part of their collaborative engagement, investors from around the world will ask these companies to:
- Implement a strong governance framework which clearly 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 increase to well below 2 degrees above pre-industrial levels.
- Provide enhanced corporate disclosure in line with the final recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and sector-specific GIC Investor Expectations on Climate Change (when applicable) to enable investors to assess the robustness of companies’ business plans against a range of climate scenarios, including well below 2-degrees and improve investment decision-making.
A five step process has been developed to identify the focus list companies.
1. Start universe: begin with a company universe that is relevant to most investors; MSCI ACWI.
Index covering 47 Markets and covering 85 percent of global investable equity
2. Truncate universe: Cut universe to largest 1000 companies by market capitalisation.
Analysis indicated this step increases alignment of top 100 companies with investors’ portfolios
3. Rank by emissions: Identify 100 focus list companies by scope 1 to 3 emissions using CDP data. Details on CDP’s modelling techniques are available here.
Using Scope 1, 2 and 3 emissions ensures value chain impacts are taken into consideration. CDP modelling process also ensures that non-disclosing companies are included.
4. Investor Risk Perception Survey: Investors will be invited to vote for a maximum of ten companies that they believe should be added to the focus list of companies from the original universe of companies. A minimum of five companies will be added by each region to ensure appropriate global coverage.
This step ensures the focus list of companies covers companies that are important at a regional level, whose impact hasn’t been realised yet or because of physical risks that aren’t captured by greenhouse gas emission.
5. Considerations (as required): The Steering Committee will review the potential exclusion of companies on a case by case basis, including when a case has been made that a company is not relevant (e.g. in this case a part listed subsidiary of another company is also included, only one company might be retained on the focus list of companies).
This step would be taken, for example, in the case of a heavily state-owned company (>95 percent state owned) being included on the focus list of companies. All exclusions will be disclosed.
An additional + list of companies have been identified via an investor survey that asked investors to identify the companies that they believe present the greatest climate-related financial risks to their investment portfolios.
These companies present risks to investment portfolios in two ways:
- Failure to adapt their operations and activities to policy, physical or technological changes related to climate change could impact revenues, expenditures, assets and liabilities, or financing activities.
- Create systemic economy-wide impacts that may harm the financial markets (e.g. rapid repricing as a consequence of a sudden and prolonged extreme weather event).
The additional + list of companies is expected to be released this year.
Each year the focus list will be revised to account for mergers and acquisitions. Additionally, a process will be developed for removing companies from the list if companies have demonstrated sufficient progress implementing the goals of the initiative. New companies may also be added to the focus list during the annual progress review.
The initial focus list of 100 companies include:
A.P. Moller – Maersk
American Electric Power Company, Inc.
Anhui Conch Cement
Canadian Natural Resources Limited
China Petroleum & Chemical Corporation
China Shenhua Energy
Daikin Industries, Ltd.
Duke Energy Corporation
Exxon Mobil Corporation
Fiat Chrysler Automobiles NV
Ford Motor Company
Gas Natural SDG SA
General Electric Company
General Motors Company
Hon Hai Precision Industry
Honda Motor Company
Ingersoll-Rand Co. Ltd.
International Paper Company
JX Holdings, Inc
Koninklijke Philips NV
Korea Electric Power Corp
Lockheed Martin Corporation
LyondellBasell Industries Cl A
Martin Marietta Materials, Inc.
MMC Norilsk Nickel OSJC
Nippon Steel & Sumitomo Metal Corporation
Nissan Motor Co., Ltd.
Oil & Natural Gas
PETROCHINA Company Limited
Petróleo Brasileiro SA – Petrobras
Procter & Gamble Company
Rosneft Oil Company
Royal Dutch Shell
Saic Motor Corporation
SK Innovation Co Ltd
Southern Copper Corporation
Suncor Energy Inc.
Suzuki Motor Corporation
Teck Resources Limited
The Dow Chemical Company
The Southern Company
Toray Industries, Inc.
Toyota Motor Corporation
United Technologies Corporation
Valero Energy Corporation
The initial focus list of 100 companies was developed using CDP (reported and modelling) data on the companies’ combined direct and indirect (scope 1, 2 and 3) emissions, including emissions associated with the use of their products. Members of the Climate Action 100+ Steering Committee thank CDP for their support.
An additional “+” list of companies, who are considered by investors to be potentially exposed to climate-related financial risks, is expected to be added to the focus list this year.