Engagement Process

Engagement with Climate Action 100+ focus companies is undertaken by investors to mitigate financial risk and to maximise the long-term value of assets. This is supported by regional working groups which provide participating investors with resources and guidance.

IN THIS SECTION

1. Investor Roles                                                                                 

2. Engagement Approaches

3. Engagement Priorities

Investor Roles

Engagement is spearheaded by a lead investor or co-lead investors, who work with several contributing investors. Lead investors can focus on a specific company, sector, or theme; contributing investors form part of specific focus company engagement teams. Investors may also engage with focus companies on an individual basis as part of Climate Action 100+ but are asked to: liaise with relevant network staff and/or lead investors to ensure engagement priorities and ambition are aligned with the goals of the initiative, as well as with the overall collaborative approach. See chapters two and three Engagement Principles and Approaches of the Signatory Handbook to learn more. 

When signing on to the initiative, investors are asked to nominate which focus companies they wish to engage with and whether this is as a lead/co-lead investor, contributing investor, or individual engager. Asset owners can choose to join as investor supporters, which means they do not participate directly in engagements but can request that their investment managers or service providers responsible for engagements join the initiative. Investors can also become thematic or sectoral lead investors, seeking to deepen engagement by providing expertise in priority areas. See page 10 of the Signatory Handbook for more information on the selection of lead investors.

Engagement Approaches

Each engagement is unique and investors may be presented with different challenges driven by a range of factors, including: the profile of the company; the company’s approach to climate change; its responsiveness to engagement; the industry or sector and the development of relevant technologies; and the regional context. Lead investors are expected to annually prepare a year-ahead engagement plan and to review progress made with the focus company engagements. The initiative also conducts progress reporting and publicly benchmarks all focus companies using the Net Zero Company Benchmark. As part of the engagement plan, there are numerous engagement tools that signatories may choose to use. The use of such tools is at the discretion of individual signatories and may evolve over the course of the engagement. For sample engagement steps, see page 21 of the Signatory Handbook.

Thematic Engagement Priorities 2023-2024

As part of Phase 2 of the initiative, Climate Action 100+ introduced thematic engagements and its commitment to publishing these annually, to increase transparency and awareness across the global initiative and support investors to manage climate-related financial risks.   

Thematic engagements are an investor-led workstream. They are engagements with a range of companies on a defined theme, for example, a Benchmark indicator or a topic such as State-Owned Enterprises. They are implemented by thematic lead investors who may be subject-matter experts on particular topics. The intended outcome of the thematic engagements is to see enhanced performance from companies, for example against the relevant indicator on the Benchmark. They complement the lead investor-company model, which may focus on core topics such as transition plans and capital expenditure.  

Thematic engagements are supported regionally by the relevant coordinating network(s). Where applicable, networks work together on cross-cutting themes. For more information, see page 11 of the phase 2 summary of changes. Pages 9-11 of the phase 2 signatory handbook also serve as the terms of reference for thematic lead investors.  

To get involved, please reach out the relevant coordinating network for further information.

 

Asia – AIGCC/PRI
  • State-owned Enterprise (SOE) engagement for key Asian markets: A focus on engagement tactics with SOEs, including key levers such as specific investor types (local, overseas, asset type) to target progress specifically on improved transparency in targets reported and/or increased alignment with the TCFD reporting (#10) and target setting (#2-4) indicators. This includes defining progress of SOE companies in the context of their local markets. 

Thematic focusses for Asia are designed to strengthen discussion towards selected Benchmark indicators. However, in view of market-specific conditions, progress through demonstrated commitment by companies should also be considered, in addition to score changes against the market-agnostic Net Zero Company Benchmark.

Australia – IGCC
  • Executive remuneration, resulting in improved company assessments against sub-indicator 8.2 on the Benchmark Disclosure Framework. 
  • Positive climate lobbying, in support of a 1.5oC-aligned Australian NDC (2035 target).  
Europe – IIGCC
  • Enhanced lobbying disclosures, resulting in improved assessments in the Benchmark Disclosure and Alignment Framework. 
  • Enhanced accounting disclosures, resulting in improved assessments on the Benchmark Disclosure and Alignment Framework. 
  • Bondholder engagement, resulting in more signatories engaging as part of CA100+ as bondholders.  

IIGCC will work with PRI on relevant European CA100+ companies.

Global – PRI
  • Engagement with SOEs, resulting in improved dialogue with companies, improved disclosures and a better understanding of companies’ climate strategies, depending on the status of the engagement with different companies
North America – Ceres
  • Increased disclosure of enhanced just transition plans within the electric power, oil & gas, and transportation sectors, resulting in improved company assessments against indicator 9 of the Benchmark Disclosure Framework.  
  • Enhanced climate accounting disclosures from companies within the oil & gas sector, resulting in improved climate accounting and audit alignment assessments. Regulator engagement to support sector-wide enforcement efforts.   
  • Increased disclosure of science-based GHG targets along with performance supporting capital allocation plans and climate transition action plans, resulting in improved company performance on indicators 5 & 6 of the Benchmark Disclosure Framework.   

Ceres will work with PRI on relevant North American CA100+ companies. 

 

About Climate Action 100+

Climate Action 100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change in order to mitigate financial risk and to maximize the long-term value of assets.

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