The Institutional Investors Group on Climate Change (IIGCC) is looking to add more companies to the list targeted by a collaborative engagement initiative that covers corporates beyond those on Climate Action 100+’s agenda.
Investor signatories of the Net Zero Engagement Initiative (NZEI) have until 31 May to have their say on the company focus list and engagement strategy for the initiative’s second year.
NZEI was formally launched in 2023 when 107 companies received letters from more than 90 investors outlining their expectations for a net zero transition plan. According to the IIGCC, a targeted engagement programme followed with investors forming engagement groups supported by the IIGCC.
The objective of the NZEI is to help investors deliver against the net zero commitments they have made, with most investors said to use the IIGCC’s Net Zero Investment Framework to work on those commitments.
NZEI signatories are now being asked to help shape the company list for 2024-2025, which also involves determining which of the year-one companies to deepen engagements with alongside deciding on new additions.
“At its core, NZEI is about scalability,” wrote Peter Taylor, IIGCC corporate programme director. “It helps investors expand the breadth of their portfolios covered by collaborative engagement in line with the goals of the Paris Agreement. As part of this expansion, the initiative is now finalising a new group of companies to add to its focus list.”
The IIGCC describes NZEI as having been set up to build on and extend the reach of investor engagement beyond the 170 Climate Action 100+ focus companies, including more companies that are heavy users of fossil fuels and “more companies that are critical to the decarbonisation pathway of individual investor portfolios”.
So far companies on the NZEI focus list represent nine sectors on both the demand and supply side of the energy transition: utilities, transport, chemicals, industrials, consumer goods, mining, and oil and gas.
Banks, which are covered in separate IIGCC workstreams, and private companies are not included.
The IIGCC has made some suggestions for NZEI signatories to consider, coming up with a draft list of companies based on factors including emissions across all scopes, market capitalisation, region, free float, and sectors already covered by IIGCC at a technical level.
All new companies must be covered by Transition Pathway Initiative data.
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