What is the Climate Action 100+?
Climate Action 100+ is a five-year initiative led by investors to engage systemically important greenhouse gas emitters and other companies across the global economy that have significant opportunities to drive the clean energy transition and help achieve the goals of the Paris Agreement. Investors are calling on companies to improve governance on climate change, curb emissions and strengthen climate-related financial disclosures.
Launched in December 2017 at the One Planet Summit by Betty T. Yee, a board member of California Public Employees’ Retirement System (CalPERS), Climate Action 100+ garnered worldwide attention as it was highlighted as one of 12 key global initiatives to tackle climate change.
Which investors support Climate Action 100+?
Climate Action 100+ requires investors to sign on to the Climate Action 100+ Sign-on Statement. The public statement sets out the investor signatories’ commitment and expectations of the companies on the initiative’s focus list. To date, it has been signed by 310 investors from across dozens of countries, who collectively manage USD $32 trillion in assets under management. The full statement and list of investors is available here.
If you are an investor interested in signing on to the Climate Action 100+ Sign-on Statement, please email: firstname.lastname@example.org. Alternately, you may contact the coordinating partner organisation in your region to learn more about how you can get involved.
Why was Climate Action 100+ formed?
In 2015, nearly 200 countries around the world 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 of Climate Action 100+ 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.
Climate Action 100+ is designed to implement the investor commitment first set out in the Global Investor Statement on Climate Change in the months leading up to the adoption of the Paris Agreement.
In that statement investors committed to the following:
“As institutional investors and consistent with our fiduciary duty to our beneficiaries, we will: …work with the companies in which we invest to ensure that they are minimising and disclosing the risks and maximizing the opportunities presented by climate change and climate policy.”
What are investors asking focus companies to do?
Investors signed on to Climate Action 100+ are requesting the boards and senior management of companies to:
1) Implement a strong governance framework which clearly articulates the board’s accountability and oversight of climate change risks and opportunities;
2) 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 level;
3) 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 Global Investor Coalition on Climate Change Investor Expectations on Climate Change 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.
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 Principles for Responsible Investment and its engagement across environmental, social and governance issues.
Why do investors choose engagement?
Global collaborative investor engagement sends a powerful signal – directly to companies – that investors are asking for and expect companies to respond to climate change. Climate change is a systemic risk – one which investors cannot diversify away from. As equity investors and universal owners, investors have the ability and the responsibility to address climate risks and seek greater disclosure on how the most systemically significant emitters are aligning with the 2-degrees transition and disclosing climate change risks and opportunities to the market.
How are lead and support investors assigned to focus companies?
When investors sign up to the initiative they nominate which companies they would like to engage with and in the capacity as lead or supporting investor. A set of principles and processes has been developed for investor signatories, by which lead investors are identified to engage with companies on the Climate Action 100+ focus list. These principles include consideration of previous history of engagement with the focus company, geographic proximity, investor capacity and stock holding over the term of the initiative. In addition, where possible, the initiative aims to ensure asset owners and asset managers are among the investors signed on to each engagement.
Does Climate Action 100+ 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 looking at how companies can efficiently address and disclose how they manage climate risk and direct and indirect scope 1, 2, and 3 emissions across their value chain.
For example, the most material or greatest source of greenhouse gas emissions of an auto manufacturer are those generated during the use of the vehicles it sells (scope 3). Value chain emissions, like those of vehicles, are substantial sources of greenhouse gas emissions. Such value chain emissions are highly material to reducing emissions. Transportation emissions account for a quarter of annual emissions. If only scope 1 and 2 emissions had been used to assess the footprint of companies, transportation emissions would have not been taken into consideration.
How was the Climate Action 100+ focus list developed?
Investors aim to engage systemically important greenhouse gas emitters and other companies across the global economy that have significant opportunities to drive the clean energy transition and help achieve the goals of the Paris Agreement.
Companies have been identified using two distinct methodologies for the initial list of 100 focus companies and the + list of focus companies.
- Initial list of 100 focus companies: In December 2017, an initial list of 100 focus companies was identified. This group of companies was selected from a major global index (MSCI ACWI) that represents 85 percent of global investable equity. The initial 100 focus companies have the highest combined direct and indirect Scope 1, 2 and 3 emissions (emissions associated with the use of their products) using CDP modelled and reported data. For companies that do not report to CDP, CDP modelled GHG emissions were used so that companies reporting to CDP were not penalized. CDP explains their modelling techniques in detail here. These initial 100 focus companies represent up to two-thirds of annual global industrial greenhouse gas emissions, according to CDP.
- “+” list of 61 focus companies: In July 2018, an additional list of 61 companies (known as the “+” list) was added to the focus list of companies. Investors recognize that emissions alone do not demark all opportunities to drive the clean energy transition or exposure to physical risks. Therefore, investor signatories were invited to nominate additional companies that are material to their investment portfolios. The “+” list of focus companies identified have either a significant opportunity to drive the clean energy transition at the global or region level or may be exposed to climate-related financial risks, including risks to physical assets, that are not captured solely by emissions data. To ensure a global distribution of the nominated companies, a minimum of five companies each were included from Asia, Australia, Europe and North America. These companies represent those that received the most interest among investor signatories in each region, indicated via a voting mechanism.
How and when is the Climate Action 100+ focus list of companies updated?
Each year, Climate Action 100+ will produce an annual benchmarking report developed by independent third-party experts to evaluate corporate progress toward the goals of the initiative. The report will highlight focus companies that have responded positively to the collaborative engagements. Companies may be removed from the focus list if they have made sufficient progress to meet the goals of the initiative.
Additionally, the focus list of companies will be revised to account for mergers and acquisitions, and additional companies may be added to the focus list during the annual progress review process. As capacity among and participation of Asia investors in the initiative grows, representation of Asia companies on the list may grow.
How was Climate Action 100+ formed?
Investor representatives from AustralianSuper, California Public Employees’ Retirement System (CalPERS), HSBC Global Asset Management, Ircantec and Manulife Asset Management have designed and developed the initiative. Climate Action 100+ is supported and coordinated by five partner organisations: Asia Investor Group on Climate Change (AIGCC); Ceres; Investor Group on Climate Change (IGCC); Institutional Investors Group on Climate Change (IIGCC); and Principles for Responsible Investment (PRI). It builds upon the collaborative investor engagement pioneered since 2012 by the four organisations that together form the Global Investor Coalition on Climate Change. It also draws upon the leadership of PRI and its investor engagements across environmental, social and governance issues.
How is Climate Action 100+ governed?
Climate Action 100+ is governed by a global Steering Committee that is made up of investor representatives from AustralianSuper, 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 (AIGCC); Ceres; Investor Group on Climate Change (IGCC); Institutional Investors Group on Climate Change (IIGCC); and Principles for Responsible Investment (PRI).
How is Climate Action 100+ funded?
As of June 2018, Climate Action 100+ is supported in part by a number of funders including ClimateWorks Foundation and KR Foundation. For further information on current Climate Action 100+ funding opportunities, please contact the Fundraising Working Group lead Mariel Cabral at email@example.com.