As institutional investors and consistent with their fiduciary duty to their beneficiaries, seeking to address the material financial risks and opportunities of climate change, investors will work with the companies in which we invest to encourage them to work towards the global goal of halving GHG emissions by 2030 and delivering net zero GHG emissions by 2050, in line with the goals of the Paris Agreement to pursue efforts to limit warming to 1.5°C.
They will do this by asking their portfolio companies on the Climate Action 100+ focus list to:
- Implement a strong governance framework which clearly articulates the board’s accountability and oversight of climate change risk;
- Take action to reduce greenhouse gas emissions across the value chain, including engagement with stakeholders such as policymakers and other actors to address the sectoral barriers to transition. This should be consistent with the Paris Agreement’s goal of limiting global average temperature increase to well below 2°C above pre-industrial levels, aiming for 1.5°C. Notably, this implies the need to move towards net-zero emissions by 2050 or sooner; and
- Provide enhanced corporate disclosure and implement transition plans to deliver on robust targets. This should be in line with the final recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and other relevant sector and regional guidance, to enable investors to assess the robustness of companies’ business plans and improve investment decision-making.
Climate Action 100+ will seek to support these efforts using frameworks and tools such as the Net Zero Company Benchmark, recognising that the pathway for an orderly transition varies across regions and sectors.
The approach that institutional investors will take to meet the goals set forth above depends on their individual strategies, policies, and practices; the mandates agreed with their respective beneficiaries; their assessments of material risks to companies and their portfolios and beneficiaries’ and institutional investors’ regulatory environments.
Investors are always bound by their obligations to meet their fiduciary duties as defined in their jurisdictions. For further information, please see the FAQs.
