By Amy Simon, Campaigns Officer

Climate change has been a hot topic this summer, amid a string of heatwaves and wildfires across the northern hemisphere. Adding fuel to the fire, a recent scientific paper warned that even if global emissions are drastically reduced in line with the ‘below 2°C’ goal of the Paris Agreement, a series of climate feedbacks could still lock the planet into a cycle of continued warming.

Thawing permafrost, forest dieback and other self-reinforcing feedbacks could drive the earth system beyond a critical threshold and towards a ‘Hothouse Earth’ warming trajectory, posing “severe risks for health, economies, political stability…and ultimately, the habitability of the planet for humans”.

It’s easy to feel powerless in the face of such a prospect, but we mustn’t be daunted into procrastination.

As the paper highlights, a range of collective actions must urgently be taken if we want to maximise our chances of sustaining a habitable planet – starting with the rapid decarbonisation of the global economy.

Towards a low-carbon economy

Fortunately, the low-carbon transition is well underway and, in light of the Taskforce for Climate-related Financial Disclosures, key players in the capital markets are increasingly concerned with the financial risks and opportunities associated with climate change. Companies and institutional investors are taking action to shift market demands, influence their peers and unlock stronger policy action in support of a decarbonised economy.

Corporates are purchasing more renewable power than ever before: 140 companies including Tesco, Apple and BMW have committed through the RE100 initiative to power their global operations using 100% renewable electricity.

ShareAction’s Investor Decarbonisation Initiative brings together a coalition of institutional investors who recognise both the moral and business case for ambitious corporate strategies to address climate risk.

Over 20 leading businesses are working to accelerate the electric vehicle transition with the EV100 initiative, while others from diverse industries have made an EP100 pledge to improve their energy productivity through smarter energy use.

Further to this, 130 companies like Hilton, Carlsberg and Nestlé have set approved science-based targets to reduce their greenhouse gas emissions in line with climate science and the Paris Agreement.

ShareAction’s Investor Decarbonisation Initiative (IDI) brings together a coalition of institutional investors – representing over $1.2 trillion in assets – who recognise both the moral and business case for ambitious corporate strategies to address climate risk.

Through the IDI, a diverse group of asset managers, pension funds and charitable trusts are encouraging high-emitting companies across the world to set science-based emissions targets, and commit to action on renewable electricity (RE100), energy productivity (EP100) and electric vehicles (EV100).

So far this year, ShareAction has sent investor-endorsed letters to 45 companies and asked questions at 19 company AGMs, urging board directors to take time-bound action on climate change.

Stepping up climate ambition ahead of the GCAS

There is so much momentum to draw hope and inspiration from. Yet, as the Hothouse Earth paper demonstrates, we must increase the speed and scale of our efforts if we are to transition to a low-carbon economy at the pace required to avoid the worst impacts of climate change.

Next week, the Global Climate Action Summit (GCAS) in San Francisco will convene leaders from cities, regions, civil society, businesses and the investment sector to celebrate progress, showcase new climate-related commitments and step up collective ambition.

The GCAS is a key opportunity for non-state actors to inspire national governments to ramp up the ambition of their own climate action plans, or ‘Nationally Determined Contributions’ (NDCs). Under the Paris Agreement, governments will come together to review and strengthen their NDCs in 2020 – by which time global emissions must have peaked if we are to stand a chance at limiting global warming to below 2°C.

Alongside robust corporate climate strategies, low-carbon capital allocation by institutional investors will be critical to enable the decarbonisation of the global economy.

Ahead of the GCAS, ShareAction has been mobilising a wide range of investors to step up their climate leadership and take bold steps to align their portfolios with the Paris Agreement. We are encouraging investors to announce ambitious commitments at the GCAS related to TCFD reporting, the phase-out of high-carbon assets, low-carbon allocation and engagement with investee companies.

Alongside Mission2020 and Climate Action Network International, ShareAction is co-hosting a GCAS affiliate event on Tuesday 11th September, to explore the role that civil society can play in encouraging Paris-aligned investment portfolios. More information is available here – we’d be delighted to see you there!

Thanks Amy! To find out more about our Investor Decarbonisation Initiative, click here