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Investor Coalition Doubles Down on Climate Demands

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A coalition of more than 500 investment groups reiterated its annual plea to governments to advance policies focused on limiting the worst impacts of climate change, with a new focus on methane emissions reduction as well as adaptation and resilience.

In an open letter published Tuesday, the Investor Agenda coalition urged policymakers to support the reduction of global methane emissions by at least 30% over 2020 levels by 2030. The group also called for governments to “scale up” public and private financing for climate change resilience and adaptation, especially in developing countries.

Investor Push-Pull

The letter comes as investors are increasingly concerned about oil and natural gas operators’ methane emissions. At its annual general meeting earlier this year, the board of directors of US oil giant Chevron came out in favor of a shareholder proposal requesting a report on the reliability of methane emissions measurement and efforts to improve the quality of such disclosures. The board's support led to a 98% vote in approval.

Meanwhile, US major Exxon Mobil found that 52% of its shareholders wanted more information around how its business would be affected under the net-zero pathway put forth by the International Energy Agency.

However, investor pressure on climate issues does appear to be reaching its limits. Shareholder resolutions asking operators to adopt stringent emissions reduction targets consistent with a 1.5° Celsius climate change scenario failed to pass at a host of large fossil fuel players.

Institutional investors are also facing pushback in the US over their low-carbon pledges. Officials in Texas recently accused BlackRock and others of “boycotting” the state’s fossil fuel industry under a new law instructing state entities to divest from blacklisted groups. Similar laws have also been passed recently in other states.

What Is Investor Agenda?

There are 532 signatories representing $39 trillion in managed assets that have endorsed Investor Agenda’s statement, including UBS Asset Management, BNP Paribas Asset Management, and Fidelity International.

BlackRock was notably absent from the list of signatories, but the firm also declined to sign on last year, before the Texas law was in effect. Other asset managers may join the coalition ahead of the COP27 conference in Egypt in November.

The Investor Agenda coalition has lobbied governments in previous years for policies addressing climate change, including carbon pricing mechanisms, ending deforestation and phasing out fossil fuel subsidies. Those demands were included in this year’s statement as well.

Topics:
Methane Emissions, CO2 Emissions, Low-Carbon Policy, Carbon Prices, ESG, Policy and Regulation
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