Climate-focused investor engagement initiative Climate Action 100+ announced today the launch of Global Sector Strategies, a new initiative focusing investor engagement strategies for decarbonization at the sector level.
The new initiative will focus on selected high-emitting sectors, starting with steel, and over the next few months targeting food and beverage, electric utilities, trucks, and diversified mining. According to Climate Action 100+, the new strategy marks the first time that sector-level decarbonisation dialogue has been led by investors.
Climate Action 100+ is an investor initiative, with 575 investors representing more than $54 trillion in assets, that targets the world’s largest corporate greenhouse gas emitters to promote taking necessary action on climate change, and align their business strategies with net zero in order to help limit average global temperature rise to 1.5 degrees Celsius. Signatories to the initiative engage with companies to ensure they implement a strong governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. framework that takes into account climate risks and opportunities, reduce emissions across the value chain, and increase climate-related financial disclosures.
Earlier this year, the initiative launched the Climate Action 100+ Net-Zero Company Benchmark, aimed at providing investors with detailed, comparative assessments of individual focus company performance and progress against a series of nine key indicators and metrics, including setting a 2050 or sooner net zero ambition, long-term, medium-term and short-term GHG reduction targets, a decarbonisation strategy, capital allocation alignment, climate policy engagement, climate governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights., and TCFD disclosure.
For the new initiative, each of the Climate Action 100+ founding investor networks, including AIGCC, Ceres, IGCC, IIGCC and PRI, will develop the sector strategies, with each strategy being led by the network with the best sector knowledge. The steel sector strategy kicks off with a report published today by IIGCC. Earlier this year, Climate Action 100+ released an aviation industry strategy published by PRI.
The new sector strategies will include global recommendations from the investors networks, distilled into specific short-term, industry-wide and regional actions to be requested from companies in each region, with investors pursuing the implementation of the actions with twice-yearly industry meetings.
Anne Simpson, Managing Investment Director, Board GovernanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. & Sustainability, CalPERS and current chair of the Climate Action 100+ Steering Committee, said:
“Investors recognise that climate change is a financial risk to their portfolios, but also that the transition to net zero provides tremendous opportunity. It is our fiduciary duty to address that risk and opportunity. This means bringing down demand for carbon intensive energy across sectors, including steel, so that we track emissions across the full value chain of the global economy. Driving that change demands that investors, companies, policymakers and civil society work in partnership at pace and scale to achieve a just transition. The Global Sector Strategies initiative of Climate Action 100+ clearly outlines what needs to happen, how and by when, so that we can ensure company strategies are credible, actionable and aligned with capital expenditure commitments. There is no time to lose and the $55 trillion signatory base supporting this work shows that investors see the urgent need for action.”
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