Shareholders have turned up the heat on the world's 100 biggest polluting companies including Australian firms BHP Billiton, Wesfarmers and Rio Tinto, in the first coordinated global effort by investors to force corporate action on climate change.
The Climate Action 100+ initiative, to be launched in Paris on Tuesday evening eastern standard time, will target 100 global companies responsible for an estimated 15 per cent of global emissions.
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It marks a significant escalation of investor pressure on corporations to rein in greenhouse gas emissions, improve climate-related financial disclosures and increase governance on climate change.
More than 200 of the world's biggest investors, responsible for $26 trillion in assets, have signed up to the initiative. It includes Australian investment giants Australian Super, AMP Capital, VicSuper, First State Super, Hesta and Cbus.
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| Mining company Rio Tinto is named by the campaign as among the world's top 100 polluting companies. Photo: Bloomberg |
Emma Herd, chief executive of the Investor Group on Climate Change in Australia, said two years had passed since the Paris climate deal was signed and investors now wanted "action that's faster and goes further than what we've seen before".
Ms Herd cited Exxon Mobil, the world's biggest oil company, which was this year forced by a shareholder vote to be more transparent about the impact of climate change on its business.
"Engagement between investors and the companies they own is one of the core foundations of our economy and how it runs," she said.
If a company does not respond to investor demands on climate change, shareholder options include resolutions and votes, and divestment.
Investors who sign up to the effort can nominate companies to be added to the list.
Companies in the sectors of oil and gas, electricity and transport make up the bulk of the 100 companies. It also includes PepsiCo and Nestle, as well as the Wesfarmers group which includes Coles, Bunnings, Kmart, Target and Officeworks, as well as coal mine assets.
A spokesperson for Wesfarmers said: "Wesfarmers regularly engages with investors on this issue and will continue to do so. As a group, we strive to reduce the emissions intensity of our businesses and improve their resilience to climate change."
The methodology used to compile the list included direct and indirect emissions, as well as emissions from transport and product consumption.
Anne Simpson, investment director of sustainability at CalPERS, the largest public pension system in the United States, said there was "nowhere to hide from climate risk".
"Ultimately shareholders are the owners of these companies and ... if we don't make sure these companies make the transformation to a low carbon economy we are exposed to the risks of their emissions, not just directly through the investments we've got in those companies but also by the indirect impact on all the other assets in our portfolio," she said.
BHP Billiton declined to comment. Its latest annual report said it had a "strong record of supporting and complying with robust reporting requirements on climate change issues".
Rio Tinto had not responded at the time of publication. The company's website says it is "taking action to improve productivity and reduce emissions. Our challenge is to meet the world's growing needs for the metals and minerals we produce, while addressing the issue of climate change."
Links
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