Investors with $1 trillion put weight behind call for big brands to step up climate targets

Investors managing over $1 trillion USD, coordinated by ShareAction, are calling on companies around the world to drastically reduce the impact of their operations on the planet, and protect the financial assets they manage from climate change.

Over 60 major shareholders such as Aegon Asset Management, Candriam Investors Group, and Ethos Foundation (a collective of Swiss pension funds) yesterday sent letters to the chief executives of 15 companies including big brands like Morrisons, Netflix, and The Walt Disney Company, and high carbon emitters from the power generation and cement sectors.

The investors in the group, called the Investor Decarbonisation Initiative, are encouraging the companies they own to set ambitious science-based climate targets to reduce their greenhouse gas emissions in line with the global Paris Agreement on climate change, and to commit to cleaner energy like renewable electricity.

In the letters, investors say they want ‘to invest in environmentally and financially sustainable companies that are prepared for and contributing to the low-carbon economy.’

Momentum behind setting science-based targets is growing, with news today that over 100 companies have now had their targets approved by the Science Based Targets initiative.

Sophia McNab, Project Manager at ShareAction, which campaigns for a more responsible investment system, said: “I still hear from some companies that they’ve received no questions from investors on environmental issues. We welcome the leadership of investors in our networks but there is more work to be done by institutional investors. On a personal note, I’d like to see my own pension fund – NEST – championing these issues.”

Emanuele Fanelli, Responsible Investment Manager at Aegon Asset Management (£279 billion AUM), said: ‘We welcome the momentum behind science-based target setting and are pleased to see that now 100 companies, from Utilities to Real Estate companies across different geographies, currently have approved science-based targets. This encouraging shift from disclosure to action is in the best interests of the environment, society at large, and company long-term investors. In general, there is still a gap between the way companies identify climate-related risks and how they are preparing to tackle them. We hope this approach to target setting becomes the new norm and it will advance the implementation of the Paris Agreement.’

Support from investors can provide vital additional encouragement to companies that recognise the need to prepare for and participate in the low-carbon transition. Investors want to hold companies whose business models are aligned with the low-carbon economy.

Isabelle Cabie, Global Head of Responsible Development at Candriam Investors Group, which manages £97 billion, said: “Climate risk is now seen as a mainstream risk to financial stability by investors and regulators around the world. It is crucial that this translates into pressure on the most high-carbon sectors who are critical in delivering the low-carbon transition. As such, we are pleased to be part of collaborative investor initiatives, such as ShareAction’s, which are driving climate change up the corporate agenda.”

Vincent Kaufmann, CEO, at Ethos Foundation which represents the 24 Swiss pension funds (£50 billion AUM) in ShareAction’s investor group, said: “Pension funds, as the guardians of their members’ savings, have an important role to play in the low-carbon transition. One way they can do this is to engage businesses, who are the world’s largest users of energy, to drive a faster transition to cleaner alternatives. Collaboration among pension funds and other shareholders can be highly effective and powerful in driving change – investors should continue to engage companies to deliver the ambitions of the Paris Agreement.”

Companies are facing increasing pressure to disclose and manage climate-related risks and opportunities following the Paris Agreement and the work of the Governor of the Bank of England Mark Carney’s Task Force on Climate-related Financial Disclosures.

As well as coordinating investor support for science-based targets, ShareAction is also calling on investors to support the shareholder resolution at Shell, asking the company to set Paris-aligned climate targets. The vote is another test of investors’ stance on climate change issues.

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Notes to editors:

  •  For more information please contact Beau O’Sullivan on beau.osullivan@shareaction.org or 07950 299 491
  •  Signatories to the letters include: Achmea Investment Management, Adrian Dominican Sisters Portfolio Advisory Board, Aegon Asset Management, Ashden Trust, Australian Ethical Investment, Bank J. Safra Sarasin, Barrow Cadbury Trust, Boston Common Asset Management, BPL Pensioen, Candriam Investors Group, Congregation of St. Joseph, Dana Investment Advisors, Daughters of Charity Province of St. Louise, Dignity Health, Domini Impact Investments, Ecofi Investissements, Environment Agency Pension Fund, ERAFP, Ethos Foundation (plus 24 of its Swiss pension fund members), First Affirmative Financial Network, Impact Investors, Impax Asset Management LLC, Jesuits in Britain, JJ Charitable Trust, Joseph Rowntree Charitable Trust, KBI Global Investors, KLP, Mark Leonard Trust, Mercy Investment Services, Mirova, NEI Investments, Polden-Puckham Charitable Foundation, ShareAction, Strathclyde Pension Fund, Trillium Asset Management and Triodos Investment Management.
  • The investor group is independent of the Science Based Targets initiative but works collaboratively to further shared aims. 380 companies have so far committed to set Paris-compliant emissions reduction targets, which are then approved by the technical experts at the Science Based Targets initiative.
  • The companies that received a letter this week are: Analog Devices, Inc., Canadian National Railway Company, CEMEX SAB de CV, Costco Wholesale Corporation, Deutsche Telekom AG, Fortum Oyj, Mitsui Fudosan Co., Ltd., Netflix Inc., Skanska AB, STMicroelectronics NV, The Walt Disney Company, TransAlta Corporation, Whirlpool Corporation, WM Morrison Supermarkets Plc and Xcel Energy Inc.
  • Letters were also sent in February to the following: A2A SpA, Ajinomoto Co. Inc., Amazon.com Inc., Dr Pepper Snapple Group Inc., HeidelbergCement AG, Intel Corporation, J Sainsbury Plc., Pinnacle West Capital Corporation, Royal Mail Group Plc, Saint-Gobain, Samsung Electronics Co. Ltd., Shree Cement Ltd., United Parcel Service Inc., Vonovia SE.
  • ShareAction is a campaigning organisation with a mission to turn the investment system into one that truly serves savers, communities, and protects our environment for the long term.
Beau O'SullivanInvestors with $1 trillion put weight behind call for big brands to step up climate targets