(31 March 2022 – Germany) The most carbon intensive corporates globally are not explicitly aligning their future capital expenditure (capex) plans with long-term greenhouse gas emission targets declares Climate Action 100+ (CA100+).
Much more action is urgently needed from focus companies to support global efforts to limit temperature rise to 1.5°C. There are 166 companies on the initiative's focus list gauged on their progress against the initiative's three engagement goals and a set of key indicators related to business alignment with the goals of the Paris Agreement. Climate Action 100+ a global investor initiative that engages with the world's largest corporate greenhouse gas emitters with the aim of those companies aligning their businesses with the aims of the Paris Agreement.
The 166 focus companies include the initial 100 ‘systemically important emitters’, identified with the highest combined direct and indirect GHG emissions, and additional companies selected by investors as critical to accelerating the net zero transition. The world's largest listed oil and gas companies cannot be considered aligned with global climate targets unless they plan for major production declines, with half facing cuts of 50 percent or more by the 2030s.
“The vast majority of companies have not set medium-term emissions reduction targets aligned with 1.5°C or fully aligned their future capital expenditures with the goals of the Paris Agreement, despite the increase in net zero commitments. This is hugely problematic for investors. They are concerned that global temperatures don't increase to the extent that it erodes their investment right across investment portfolios and asset classes. It is really alarming” commented Climate Action 100+ Director at the Investor Group on Climate Change (IGCC), Laura Hillis.
“Overall the Net Zero Company Benchmark clearly shows that focus companies are not making the progress required to align with achieving the 1.5°C climate goal agreed in Paris and reaffirmed in Glasgow last year. Given that these companies represent the world’s largest corporate greenhouse gas emitters, their ambition and pace of change is critical to a successful transition and needs to accelerate. The latest IPCC report starkly outlined the social and economic imperative for this. As a consequence, we should expect a ratcheting of investor-led shareholder resolutions as well as increased scrutiny on transition plans brought to the vote, starting with the imminent AGM season” said GAM Investments Global Head of Sustainable and Impact Investment, Stephanie Maier.