CalPERS’ Cohen takes lead of Climate Action 100+ governing committee
Michael Cohen, chief operating investment officer of the at $462.8bn US pension fund CalPERS has been appointed as chair of the Steering Committee for the investor coalition Climate Action 100+
In his new role, Cohen will be responsible for setting the strategy for the investor coalition, which is backed by some 700 members across 33 markets with the aim to push corporates on adopting more ambitious climate action.
The role rotates every 12 months between different regional representatives on the committee. Cohen takes over from François Humbert of Generali Asset Management.
CalPERS has been a co-founder of the investor network which launched in 2017 and has also served as its inaugural chair.
But Cohen is now facing new challenges. Climate Action 100+ has been plagued by a number of prominent exits from asset managers, as J.P. Morgan and State Street announced their departures within a short period of time. Meanwhile, BlackRock has limited its membership status to BlackRock International which commands a much smaller volume of assets than the US business.
A key task for Cohen will be to support the successful rollout of Climate Action 100+’s phase 2. With cynicism on stewardship growing and investor coalitions risking the accusation of being talking shops, Climate Action 100+ intends to ramp up its engagement efforts.
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In the first five years since its inception, some 75% of companies on the Climate Action 100+ focus list have adopted net zero targets, the focus is now on pushing for more transparent disclosure standards to ensure that pledges are being put into action, the investor coalition said last year.
This also involves tougher expectations on investor members. Every focus company has been assigned a lead investor who is expected to disclose their annual schedule of engagements with the respective company and steps being taken to escalate shareholder demands.
Another challenge for the stewardship network is the move towards divestment from fossil fuels among major institutional investors. With pension funds such as PFZW, previously Climate Action 100+ lead investor for Shell, announcing their decision to sell off fossil fuel holdings, it could become harder for investors to influence the world’s heaviest emitters.
CalPERS itself has in the past been a vocal opponent of fossil divestment, CalPERS CEO Marcie Frost said the fund would be abandoning its fiduciary duty by divesting from fossil fuels. The fund could still face the introduction of the Fossil Fuel Divestment Act, which could force the Californian systems to divest their $15bn in fossil fuel holdings.
