By Michael Cohen, outgoing chair of the Climate Action 100+ global Steering Committee.
Introduction
March marked the end of my tenure as chair of the Climate Action 100+ global Steering Committee. As Valeria Piani, Head of Stewardship at Phoenix Group, prepares to take over as the initiative’s incoming chair, I wanted to take a moment and reflect on the past year.
This past year has marked a turning point for Climate Action 100+. We have made significant progress but also faced notable challenges such as escalating geopolitical tensions and record-breaking temperatures surpassing critical thresholds. Our resilience has been tested, even as these events have reaffirmed the urgency of our mission.
We have witnessed misrepresentation not only of the initiative but also investor stewardship of the risks posed by climate change. Climate risk is financial risk, and investors must have the tools to act on these risks and opportunities, in line with their fiduciary duty to their clients.
We view these challenges not as setbacks, but rather as a catalyst to reassess our strategies and direction.
Reflecting on a Year of Transition and Transformation
To be clear we are making progress. The 2024 Net Zero Company Benchmark shows that companies acknowledge the financial risks of climate change and are committed to achieving a future in line with the initiative’s three goals.
Eighty percent of focus companies have set an ambition to reach net zero by 2050 or sooner, marking an evolution from the early days when such commitments were scarce. There’s also been a considerable uptick in companies aligning their disclosures with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, with 88% of companies publicly committing to implementing these. Ninety percent of companies continue to disclose evidence of Board-level oversight of climate risk management, and for the first time we’re seeing a majority (65%) of companies reducing their emissions intensity over the previous three years.
Six global case studies were published over the past year that showcased progress made by focus companies. Three of these case studies include joint statements with the companies—Enel, Pemex, and Rio Tinto—on the value of engaging with investors.
In February, we published the 2024 Progress Report, which highlights this work and additional progress on thematic and sectoral engagements undertaken by Climate Action 100+ signatories.
These accomplishments underscore the power of like-minded investors in making the business case for employing corporate strategies towards a more sustainable trajectory.
Looking Ahead: The Path Forward
Because change is incremental, continued dialogue with companies is essential to drive sustained progress.
We must continue to engage companies to not only consider goals to reduce pollution but to enact transition plans that detail how to meet those goals. These goals need not be inconsistent with long-term profitability, and in fact can enhance shareholder value.
While we saw an increase in companies providing investors with details about their transition plans, greater action is required to put these plans in place. This will help investors and companies alike identify gaps in corporate climate action, investment, and policy that can be addressed in the short-, medium-, and long-term.
In Closing
Lastly, I would like to express my heartfelt gratitude to the members of the Climate Action 100+ Steering Committee, the network partners, and support staff for their hard work and dedication during my time as Chair. The mission endures and I look forward to our continued work together. Let us carry forward the lessons learned and continue to build on the momentum of the previous six years.