Climate roundup: Investor call for corporate emission targets swells

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More than 200 capital providers, including European pension funds and asset managers, have called on 1,600 high impact companies to “urgently” set emission reduction targets through the Science-Based Targets initiative (SBTi).

The number of institutions backing the campaign, which is coordinated by non-profit CDP, has grown by 60% since the 2020 request.

Pension funds that have joined the campaign this year include Austria’s Bundespensionskasse, France’s ERAFP, Tesco Pension Investment in the UK, and many more.

Other investors and lenders backing the campaign include Allianz, Amundi, Credit Agricole, Legal & General Investment Management, and Manulife Investment Management.

Joining the financial institutions in asking for science-based targets this year are 26 large corporate buyers that use CDP to green their supply chain, including L’Oréal and Renault Group.

The businesses that have been targeted account for 11.9 gigatons of emissions (Scope 1 and 2), which CDP said was equivalent to more than the total annual of the US and European Union combined.

According to CDP, 8.1% of the companies targeted in the campaign last year have since joined the SBTi.

The non-profit said that 56% of companies asked by CDP reported that the campaign had a direct influence over their decision, while 96% reported that general investor pressure led to them setting a target.

Laurent Babikian, joint global director capital markets at CDP, said the net-zero goals financial institutions had committed to were “impossible to achieve without the companies they lend to and invest in having robust science-based targets that drive rapid decarbonisation in the entire value chain in line with a maximum of 1.5°C of global warming”.

Border to Coast commits to net-zero

Border to Coast Pensions Partnership has become the latest UK local authority pension asset pool to commit to achieving net-zero greenhouse gas emissions across its investments by 2050.

It announced the commitment in conjunction with the release of its first standalone climate change policy, which it aims to implement over the next 12 months.

A net-zero implementation plan is scheduled for publication by September next year. Border to Coast said its measures would be informed by the Net Zero Investment Framework developed under the auspices of the Institutional Investors Group on Climate Change.

Rachel Elwell, CEO at Border to Coast, said collective action was required.

“Together with our partner funds, we will work with like-minded investors to drive positive change in the companies we invest in, engage with policymakers and regulators to highlight where systemic solutions are required, and seek to understand how developed economies can support developing and emerging markets in this essential journey,” she said.

The chief investment officer is responsible for the implementation and management of the climate change policy, with oversight from the investment committee, which is chaired by the CEO.

Border to Coast is owned by 11 local government pension schemes with some £55bn (€63.6bn) in assets between them. It said it intends to become a signatory to the Net Zero Asset Managers initiative later this year.