Climate Action 100+ can confirm that JP Morgan Asset Management, State Street Global Advisors, and PIMCO have decided to withdraw from the initiative. BlackRock (“BlackRock, Inc.”) has also transferred its participation in Climate Action 100+ to BlackRock International. While we are disappointed to see them go, hundreds of investor signatories remain committed to ensuring 170 of the largest greenhouse gas emitters reduce emissions, improve governance, and strengthen climate-related financial disclosures.
Progress to date
Climate Action 100+ is the world’s largest voluntary investor engagement initiative focused on climate change. Over the years, its signatories have achieved remarkable progress in driving the business transition to a net zero emissions economy and have set the industry standard for corporate climate ambition and action.
Based on the first-of-its-kind Net Zero Company Benchmark, our assessments show 77% of focus companies have pledged to achieve net zero emissions by 2050 or earlier, covering at least Scope 1 and 2 emissions. Additionally, 93% of focus companies have implemented board committee oversight of climate change risks and opportunities, while 90% of focus companies explicitly committed to aligning their disclosures with the TCFD recommendations.
However, Climate Action 100+ recognizes that the climate crisis continues to pose an ever-increasing financial risk to long-term shareholder value and the broader economy, and we cannot afford to take a step back now. With record high temperatures and catastrophic weather events happening more frequently and with greater intensity, ambitious action is more crucial than ever to cut emissions in half in this decade and create long-term shareholder value.
Climate risk is financial risk
The fundamental principle that underpins Climate Action 100+ is that climate risk is financial risk. Actively managing climate-related risk is consistent with managing any other financial risk.
Investors participating in Climate Action 100+ and engaging with companies do so to manage risk and opportunity to preserve long-term shareholder value for their clients and beneficiaries, in line with their fiduciary duties.
Importantly, all participating investors are independent fiduciaries responsible for their own investment and voting decisions, and they agree to always act independently in setting strategies, policies and practices and deciding whether and how to engage with focus companies based on their own understanding of their best interests. It is also a matter for individual signatories to make their own decisions regarding ongoing participation in the initiative.
Consistent in purpose and approach
In June 2023, Climate Action 100+ launched its phase two strategy following an extensive and thorough consultation with investor signatories.
Climate Action 100+ has been consistent in its fundamental purpose of ensuring the world’s largest corporate greenhouse gas emitters take necessary action on climate change. The initiative has always been action-orientated and about more than disclosure. For instance, the second of the three core asks of companies is centered upon asking companies to ‘take action to reduce GHG emissions across the value chain’.
Furthermore, the updated ask of companies to implement transition plans in phase two is logical and naturally builds on what came before – indeed many investors have already been asking companies for these for some time.
Specifically, in phase one, investors asked companies for enhanced disclosures to enable them to assess the robustness of companies’ business plans against a range of climate scenarios. This was intended to improve investment decision making. Having disclosed the risks, it is natural progression that in phase two investors ask companies to address them, i.e. to implement transition plans.
The initiative continues to have the backing and support from hundreds of investors globally, including asset owners, as shown by the 60 new signatories joining since the launch of phase two alone.
The Climate Action 100+ full disclaimer can be found here.