What is the Climate Action 100+?
The Climate Action 100+ is a new five-year investor initiative led by investors to engage the world’s largest corporate greenhouse gas emitters to improve governance on climate change, curb emissions and strengthen climate-related financial disclosures.
Investors participating in the Climate Action 100+ will work with the companies in which they invest to ensure that companies are minimising and disclosing the risks and maximising the opportunities presented by climate change.
Climate Action 100+ is designed to implement the commitment first set out in the Global Investor Statement on Climate Change in the months leading up to the adoption of the historic Paris Agreement.
Which investors support the initiative?
Since the first invitation to sign on to the initiative was first issued in September 2017, 225 investors with more than USD $26.3 trillion have signed on to Climate Action 100+. The full list of founding investor signatories who have signed on to the Climate Action 100+ Sign-on Statement can be found here.
Investor representatives from Australian Super, California Public Employees’ Retirement System (CalPERS), HSBC Global Asset Management, Ircantec and Manulife Asset Management have helped to lead the design and development of the initiative.
Additional investors are encouraged to sign up for the initiative by contacting the Implementation Working Group co-ordinators Oliver Grayer or Ben Pincombe at email@example.com and/or working through the coordinating partner organisation in their respective region.
What are investors asking companies to do?
Investors supporting the initiative will be requesting the boards and senior management of companies to:
- Implement a strong governance framework which clearly articulates the board’s accountability and oversight of climate change risks and opportunities;
- Take action to reduce greenhouse gas emissions across the value chain, consistent with the Paris Agreement’s goal of limiting global average temperature increase to well below 2 degrees Celsius 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, when applicable , sector-specific Global Investor Coalition on Climate Change Investor Expectations on Climate Change to enable investors to assess the robustness of companies’ business plans against a range of climate scenarios, including well below 2-degrees Celsius, and improve investment decision-making.
 The existing GIC Investor Expectations sector guides cover oil and gas, mining, utilities and auto manufacturers and provide additional sector specific disclosure recommendations, particularly regarding the oversight of public policy positions.
Which companies are included on the focus list and why?
The initial focus list of 100 companies are among the most significant global emitters of greenhouse gases, based on direct and indirect (scope 1, 2 and 3) emissions data, as reported and modelled by CDP. The list includes, but is not limited to, companies within the oil and gas, electric power and transportation sectors.
An additional “+” list of companies, who are identified by investors to be potentially exposed to climate-related financial risks, are expected to be added to the focus list next year and released at the 2018 Investor Summit on Climate Risk in New York City.
How can a company be removed from this list?
Investor who are shareholders of each company on the focus list will contact investee companies at the board and senior management level to discuss the engagement agenda in further detail.
Each year, in partnership with researchers, Climate Action 100+ will produce a public annual report that will assess how the companies have responded to the collaborative engagement and set the investors’ engagement priorities for the year ahead.
Companies may be removed from the list if they are considered by the Steering Committee to have made sufficient progress against the goals of the initiative.
Will the initiative focus on operational emissions or emissions across the value chain?
Climate Action 100+ is focused on ensuring that companies take into consideration climate-related risks and impacts associated with their most material sources of greenhouse gas emissions. This means, that investors will be asking companies to efficiently address and disclose how they manage climate risk and direct and indirect (scope 1, 2, and 3) emissions across their value chain.
Why are the recommendations of the Financial Stability Board’s Taskforce on Climate-Related Disclosure (TCFD) so important?
Mark Carney, Governor of the Bank of England and Chair of the Financial Stability Board, has stated that the TCFD Recommendations “set out the disclosures that a wide range of users and preparers of financial filings have said are essential to understanding a company’s climate-related risks and opportunities.” Accordingly, by seeking disclosure aligned to the TCFD framework, investors secure more complete, meaningful, reliable, and consistent information.
Why was this initiative formed?
Nearly 200 countries around the world have signed (and 170 have already ratified) the Paris Agreement, which aims to keep the increase in global average temperature to well below 2-degrees Celsius above pre-industrial levels. The investor signatories to this initiative believe that engaging and working with the companies in which they invest – to secure greater disclosure of climate change risks and robust company strategies aligned with the Paris Agreement – is consistent with their fiduciary duty and is essential to achieve the goals of the Paris Agreement.
How is the Climate Action 100+ different from other engagements on climate change?
Climate Action 100+ brings together and builds on a number of pre-existing investor-led engagement initiatives that have been operating in different regions of the world. It will build on the climate change engagement pioneered by the Institutional Investor Group on Climate Change Collaborative Engagement Group in Europe, developed by the Aiming for A Coalition, and pursued under the Ceres Carbon Asset Risk initiative in North America. It also draws on the leadership of the UN Principles for Responsible Investment and its engagement across environmental, social and governance issues.
How is the Climate Action 100+ governed?
Climate Action 100+ is governed by a global Steering Committee that is made up of investor representatives from Australian Super, CalPERS, HSBC Global Asset Management, Ircantec and Manulife Asset Management. It is also made up of lead executives from the partner organisations coordinating the initiative: Asia Investor Group on Climate Change, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, and Principles for Responsible Investment.