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Support for decarbonisation has also been spurred on by Climate Action 100+ , a group of over 570 investors engaging with large organisations to take action on climatechange and drive emission reductions, with further pressure on investment groups anticipated as more focus is placed on their emissions and climate impacts.
This backsliding has increased polarisation between investors, with some choosing to divest and others – in recognition of their responsibility as universal owners – doubling down on engagement with the sector. There is value in engagement, provided it happens over a defined period and there are defined outcomes.
By divesting its 20% stake in Rosneft, BP also disposed of around a third of its oil supplies. As divestment sceptics know, there’s a big difference between reducing portfolio and real-world CO2 emissions. But will the energy giants diversify from or double down on fossil fuels in response to inevitable write-offs on strandedassets?
The risk could also manifest in strategic litigation being brought or encouraged by NGOs seeking to compel or exert pressure on investors to change investment strategy. Investors often underestimate indirect legal risks despite the financial toll of lawsuits against investee companies,” Clarke said.
When it comes to gathering the collective will to tackle climatechange, it is often argued that public policy actions and private sector commitments are mutually reinforcing, spurring each side to go further and faster. The private sector’s ability to accelerate the pace of net zero transition is open to question.
The risk could also manifest in strategic litigation being brought or encouraged by NGOs seeking to compel or exert pressure on investors to change investment strategy. Investors often underestimate indirect legal risks despite the financial toll of lawsuits against investee companies,” Clarke said.
Adaptation themes will be incorporated into the network’s workstreams over the next two years. To better stimulate investment in climate resilience across Australia and New Zealand, the Investor Group on ClimateChange (IGCC) has developed its ‘ Road to Resilience ’ strategy.
Investors continue to suffer from poor-quality climate-related information in company reports and other statements, particularly from firms with the highest CO2 emissions. That’s the finding of a major new report by Carbon Tracker, the independent think tank that researches the effects of climatechange on financial markets.
Reasons are manifold but include better risk management, earlier identification of strandedassets, and the realisation that Paris Agreement goals are in jeopardy. The results affect divestments in our portfolio.” Climate-intensive companies tend to be highlighted by this metric and yield the best and worst scores.
C of warming, the Inevitable Policy Response calculates that current government policies, ie those in place pre-COP28, will only limit climatechange to 1.8°C Taking a tough stance in the AGM season may not be effective without broad-based support or a deeper toolbox, as UK asset owners found out last year.
The report warns that fossil fuel demand will peak as government policies to cut emissions, asset owners’ net-zero commitments and the rapid growth of clean energy technologies combine to transition the economy towards renewables. C, in line with the Paris Agreement goal. . “If
We have primarily concentrated on the oil and gas industry, but the outcomes have been disappointingly limited, particularly with recent target reversals. “It may be necessary to reconsider our approach.” However, for some investors the limited progress of the oil and gas industry on climate forced them to cut ties with the sector.
Swedish government pension fund AP7 is a universal owner that manages around SEK1 trillion (US$968 billion) in AuM, with 90% of its assets invested in a diversified equities portfolio across more than 3,000 companies.
The common use of ‘materiality’ and ‘scenario analysis’ reported by managers suggests these are already prevalent topics, while scarce mentions of ‘divestment effectiveness assessment’ or ‘enlightened active ownership’ “is consistent with the view that, in general, they are future behaviours,” the report said. A long way to go”.
For investors and companies with assets within those key biodiversity areas, this raises the issue of strandedassets. A limited toolbox A further lesson from investors’ experience of understanding and addressing climate risk has been to not let perfect being the enemy of good, from the perspective of information quality.
University activists are increasingly citing the oil and gas industry’s targeting of kids in the classroom as another reason to divest from fossil fuels. Climate education is a problem at many of America’s 100,000 public schools. trillion climate-focused infrastructure bill. The divestment solution.
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