CORPORATES GET REAL ON CLIMATE CHANGE TARGETS

CLIMATE change used to be the stuff of placards and protests outside company headquarters. Now, the action has moved into the boardrooms, as shareholders and investors demand definitive targets to reduce emissions.

- GURBIR SINGH

 

Times are indeed changing. BlackRock, the world’s largest asset manager with $9.6 trillion in assets, said in a statement this week, that at least three quarters of its investments in companies and governments will be tied to issuers with a scientific target to cut net greenhouse gas emissions to zero by 2050, up from 25% currently. It joined a group of money managers called the Net Zero Asset Managers Initiative (NZAMI)in March 2021 aiming to get to net-zero emissions across their assets. BlackRock however clarified that its “role in the transition is as a fiduciary to our clients. Our role is to help them navigate investment risks and opportunities, not to engineer a specific decarbonization outcome in the real economy."

It's happening not only in Europe and the US, but in the more conservative East. Reuters reports some big Japanese companies including Sumitomo Mitsui Financial Group, Tokyo Electric Power (Tepco) and Mitsubishi Corp will face resolutions from activist shareholders urging greater commitment to tackling climate change at their annual meetings this year.

Some of the activist groups have pointed that the lifetime emissions from 10 proposed liquefied natural gas (LNG) power projects involving these companies are estimated to be 1.2 billion tonnes of carbon dioxide (Co2) – double that of Japan’s 2030 reduction target. Many of these company AGMs may reject these resolutions, but it is significant that the discussion has reached some of the most conservative boardrooms.