Climate Action 100+ (CA100+) has seen 71 investors exit the climate engagement group since June 2023, with Paris-aligned allocation assessments seeing limited progress.
This figure was revealed in the group’s annual assessments for 168 companies based on the Net Zero Company Benchmark.
CA100+ confirmed that 45 of 71 exiting investors were US-based voluntarily withdrawing from the group, with the remaining 26 being categorised as “administrative updates”, which translates to them no longer being signatories.
Goldman Sachs Asset Management (GSAM) said in August it was to leave the group, an announcement that followed news about major players such as JP Morgan Asset Management (JPMAM) and State Street Global Advisors (SSGA) leaving, along with BlackRock’s US-based arm earlier this year.
CA100+ confirmed today that 90 new investors had joined, resulting in net gains of 19 signatories since June 2023.
The regional breakdown of new signatories includes two in Africa, 10 in Asia, 12 in Australasia, 52 in Europe, 10 in North America, and four in South America, the group said, adding that three-quarters (75%) of new signatories have joined as contributing investors on company engagements.
Alignment
This year’s assessment also found that decarbonisation is underway for many companies based on emissions intensity, but few are reducing their emissions at the pace necessary to achieve a 1.5°C aligned pathway.
“This year’s report offers some encouragement that the urgency of our engagements is breaking through. But make no mistake, more must be done and there’s no time to waste,” said Michael Cohen, CalPERS chief operating investment officer and global steering committee chair.
While 2024 has seen a marginal increase in companies improving the quality of their review process, the report found that companies are not effectively reviewing if their climate policy positions are aligned with the Paris Agreement.
Additionally, despite an improved alignment since previous iterations, the large majority remain partially aligned in their climate policy engagement actions.
Furthermore, the alignment of oil and gas companies’ capital expenditure and broader transition strategies has regressed since the 2023 assessments, increasing their exposure to financial risks in a 1.5°C-aligned future, the report found.
Despite this, the vast majority of companies have set net zero 2050 emissions targets for their operations and assigned board responsibility for climate risk oversight, demonstrating widespread recognition that climate risk is financial risk.
Stephanie Pfeifer, chief executive officer of the Institutional Investors Group on Climate Change (IIGCC) and global steering committee member of CA100+, said that while more companies need to make greater progress in ensuring their business is fit for purpose in a low carbon economy, there are signs of constructive dialogue and some positive action taking place.
“Investors will want to build on the pockets of positive company progress as they look to further manage their investment exposure to climate risk and opportunities,” she said.
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