More than 50 investors are on a waiting list to join Climate Action 100+, despite continued attempts by ‘anti-ESG’ Republicans to challenge the legality of the initiative.
CA100+, which coordinates shareholders to encourage the world’s most polluting companies to decarbonise, has attracted interest from more than 100 additional institutional investors since last year.
However, it put a freeze on signing up new members in 2022, while it developed the next stage of its strategy. That second phase kicked-off over the summer, and will see CA100+ focus on “inspir[ing] companies to move from words to action”.
In a progress report published last month, the group concluded that, while many firms were making progress on climate targets and disclosure, “the majority of focus companies’ actions are not aligned with the Paris Agreement”.
Around half of the 100 investors hoping to join the initiative have now been signed up, with the remaining 55 due to be added over coming months as capacity becomes available, a spokesperson said.
Signatories are assigned to work on companies based in part on the size of their holdings or their geographical relevance. Under the second phase, investors may also join specific thematic or sector-focused engagement projects.
ESG backlash
The demand comes despite continued legal threats from ‘anti-ESG’ politicians in the US, who argue that CA100+ may breach competition rules by enabling investors to act in concert.
Mindy Lubber, CEO of US sustainability body Ceres, which helps convene CA100+, has received multiple subpoenas from Republicans asking her to hand over “documents and communications related to how Ceres and Climate Action 100+ advance ESG policies,” for example.
CA100+ has repeatedly denied the allegations, but that hasn’t stopped some members - including Loomis Sayles and Walter Scott & Partners – from exiting the initiative recently.
Next steps
Writing in IPE’s ESG report this month, Adam Matthews, the chief responsible investment officer for the Church of England Pensions Board, argues that CA100+ “must prove its worth”.
One of the most vocal champions of the engagement initiative over the years, Matthews insists that its second phase “can’t just be more of the same” and that members “must learn lessons from its five years of engagement”.
In particular, Matthews said it was “disappointing” that CA100+ members did not put up more of a fight against decisions by BP and Shell to weaken their climate commitments, particularly at their annual meetings in the spring.
“A failure to support climate resolutions and support for director re-elections at these companies sent the message: ‘Your investors do not care about climate change’,” he said, adding that, while closed-door engagement could be effective, “it’s also fair to say investor rhetoric has not always matched public action, and investors must be willing to escalate using public-facing levers to drive change”.
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