Carbon-emitting engagement group The Climate Action 100+ (CA100+) has released the second phase of its campaign targeting the world’s highest emitting companies, focusing on areas such as enhanced corporate disclosure and implementing transition plans to deliver on robust targets.
The CA100+ will also look for firms to implement a strong governance framework which clearly shows the board’s accountability and oversight of climate change risk.
Lead investors at the CA100+ will also be asked to submit an annual schedule of engagement, specifying actions and escalations strategies they intend to deploy, and will now be able to opt-in to disclosing their organisation’s identity on the Climate Action 100+ website, with the intention to provide greater transparency within the organisation.
Climate Action 100+ is governed by a global steering committee. In Phase 1, this was comprised of the five investor network CEOs (of the AIGCC, Ceres, IGCC, IIGCC, and PRI) and five investor representatives.
For Phase 2, the steering committee has been expanded to fifteen members. This comprises of the five investor network CEOs and ten investor representatives.
While the first phase of the CA100+ has seen notable successes in its engagement approach, such as 92% of focus companies now having some level of executive oversight, and 75% of companies committing to net zero by 2050.
There have also been notable failures in its approach, such as focus company Saudi Aramco yet to achieve a single one of the organisation’s ten climate targets.
Speaking to Net Zero Investor, Adam Matthews, chief responsible investment officer at the Church of England Pensions Board, and chair of the Transition Pathway Initiative, said: “I'm very clear the CA100+ has been an unequivocal success. But does it still need to achieve more? Absolutely. And does it need to do more in the next phase? Yes. But it needs to change its tactics as well."
He added: “Having a focus on the demand side, and understanding how quickly individual companies or sectors can accept oil and gas dependencies, and how quickly they can move to alternate energy sources, I think should be a key priority.”
The CA100+ has also been caught up in the anti-ESG movement taking hold in the US, with Arizona Attorney General Mark Brnovich going so far as to allege the organisation’s activities equated to unlawful market manipulation.
Francois Humbert, current Steering Committee chair and lead engagement manager - Generali Insurance asset management, said “Phase 2 [of the CA100+] is the time to demonstrate the additionality of the initiative, and to work with our investor signatories to support an orderly, just transition for their focus companies.
“Additional expected transparency in our practices will ensure greater accountability, and the new governance of the steering committee will enable us to be more representative of the wide diversity of signatories," Humbert noted.
"In addition, the new sector and thematic engagements will enable signatories to bring additional value inside their engagement groups and to the companies they engage.”
To begin Phase 2, all CA100+ signatories will be required to fill in a short survey, confirming their contact information and how they would like to participate.
