Pension funds-backed Ethos Foundation is teaming up with the French Agency for Ecological Transition (ADEME), the French Sustainable Investment Forum (SIF), and the World Benchmarking Alliance (WBA) to closely look at transition plans of European listed companies at annual general meetings (AGMs).
Last year, Ethos introduced a new methodology it developed, called Ethos climate transition ratings, to gauge how credible plans of listed companies to transition to net zero are.
The foundation developed the methodology precisely to engage with “the biggest CO2 emitters”, meaning companies scoring highest temperatures and contributing to global warming, or companies with low credibility, chief executive officer Vincent Kaufmann told IPE at the time.
The Ethos climate transition ratings are also based on Assessing Low-Carbon Transition (ACT) methodology, developed by ADEME in 2015, to assess whether a company is on the path to play a role in the low-carbon economy, it said in a statement today.
The methodology developed by ACT considers companies’ objectives, investments, activities, governance, value chain, lobbying and business model from a climate protection perspective, it added.
SIF and FinanceClimAct will publish detailed analysis on their websites before Say on Climate votes of listed companies in Europe during this year’s AGM season. This approach applies also to companies in the UK and in Switzerland, it said.
Analysts at Ethos are responsible for the ACT assessments of Swiss-listed companies disclosing climate transition strategy in a Say on Climate vote, Ethos said.
In the past few years, SIF and ADEME started publishing analysis on climate transition plans of companies before shareholders’ votes at AGMs.
Last year, ADEME cooperated with SIF to look into climate plans submitted by French companies to their shareholders for a vote, using the ACT methodology, it added.
This year, Ethos and WBA are contributing to the effort to assess climate transition plans of companies in Europe.
Ethos’ Kaufmann said: “It is essential for shareholders to be able to rely on robust evaluation systems that allow them to assess the credibility of the climate strategies implemented by companies.”
“Thanks to this partnership, we will have an effective tool with which to assess the relevance of the climate plans submitted to shareholders for approval,” he added.
Today, Ethos is opposing the sustainability report of pharmaceutical company Roche at its AGM, considering the company’s climate strategy “insufficient”, not based on scientifically validated targets, and ultimately not credible, to reduce greenhouse gas emissions.
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