Dive Brief:
- A group of asset and pension fund managers who collectively oversee $4.6 trillion said Tuesday they were backing Climate Action 100+ after several prominent members departed the investor group earlier this year.
- The climate coalition, which advocates for curbing the carbon footprint of the world’s largest corporate greenhouse gas emitters, received the endorsement from 44 asset owners across the world. These include the California Public Employees’ Retirement System — the largest public pension fund in the country — the California State Teachers’ Retirement System, the New York State Common Retirement Fund and the New York City comptroller’s office.
- The group said in a statement that collaboration with other investors through CA100+ is an “effective and efficient way to address both the specific and systematic risks” climate change poses on investments. The financial managers also said they remained “fully committed” to participating in the climate coalition’s initiative.
Dive Insight:
The group’s statement — which included signatories from the U.K., Switzerland, Netherlands, Sweden, Canada and more — stressed three factors investors needed to tackle when calculating and mitigating climate risk.
The group advised investors to take further action to address systematic risks associated with climate change and said such action will require cooperation among global leaders, governments, corporations and investors. The signatories also said climate risk is an investment risk and, hence, addressing such risks is a “fiduciary imperative” all investors should abide by. The statement concluded that collaboration was key in staying up to date with regulation requirements and prompted more efficient and effective results.
However, the group said it recognized “there are, and will continue to be, complexities and nuances in the path to achieving a climate resilient future.”
The announcement comes a few months after JPMorgan Asset Management and State Street departed CA100+. BlackRock transferred its membership to a smaller international arm around the same time.
JPMorgan previously attributed the exit to the development of its own climate risk engagement framework in an emailed statement to ESG Dive, while State Street said the coalition’s enhanced priorities for members are not in line with its independent decision-making.
Following those departures, the Pacific Investment Management Company also withdrew its membership from the climate coalition, noting that CA100+ was “no longer aligned with PIMCO’s approach to sustainability.”
The member exodus came shortly after CA100+ announced its “phase 2” requirements last June, which required signatories to enhance their corporate disclosure and implement climate transition plans — an add-on to its original agenda that pushed for companies to make climate-related disclosures. The second phase also requires participating investors to submit an annual schedule of engagement specifying the climate action and escalation strategies they intend to implement.
