Climate change was once the subject of placards and protests outside the company’s headquarters. Now the action has moved to boardrooms, as shareholders and investors demand definitive targets to cut emissions. Times are indeed changing. BlackRock, the world’s largest asset manager with $9.6 trillion in assets, said in a statement this week that at least three-quarters of its corporate and government investments will be tied to issuers. with the scientific objective of reducing net greenhouse gas emissions to zero by 2050, compared to 25% currently. He joined a group of fund managers called Net Zero Asset Managers Initiative (NZAMI) in March 2021 with the aim of achieving net zero emissions across all of their assets. BlackRock clarified, however, that its “role in the transition is as a fiduciary to our clients. Our role is to help them manage investment risks and opportunities, not to design a specific decarbonization outcome in the economy.” real.”
This happens not only in Europe and the United States, but in the more conservative East. Reuters reports that some major Japanese companies, including Sumitomo Mitsui Financial Group, Tokyo Electric Power (Tepco) and Mitsubishi Corp, will face activist shareholder resolutions calling for greater commitment to tackling climate change at their meetings annual this year.
Some of the activist groups pointed out that lifetime emissions from 10 proposed liquefied natural gas (LNG) power projects involving these companies are estimated at 1.2 billion tonnes of carbon dioxide (Co2), double of Japan’s 2030 reduction target. Many of these company general meetings may reject these resolutions, but it is significant that the discussion reached some of the more conservative boardrooms.
Even Mukesh Ambani of Reliance Industries made the right noise when he told the Qatar Economic Forum last June that he was aiming for his refining and other units to achieve net zero carbon emissions by 2035.
The weapon of litigation
The UN’s Intergovernmental Panel on Climate Change (IPCC) has estimated that to limit global warning to 1.5 degrees Celsius above pre-industrial levels, an average of 6 billion tonnes of carbon dioxide of carbon will have to be removed from the atmosphere each year by 2050. Currently, only 10,000 tons of Co2 have been captured to date.
New corporate initiatives to limit greenhouse gases (GHGs) and phase out fossil fuel industries aren’t exactly driven by philanthropic goals; it is about limiting the impending costs imposed by activist litigation. Over the past few months, the UN’s Intergovernmental Panel on Climate Change (IPCC) has released a series of startling reports, by the world’s most accomplished climate scientists, on how close a disaster is. human-caused environmental. The third and final report – Mitigating Climate Change – released recently, validates litigation as a tool to confront the fossil fuel industry and incite local governments.
The report says that since 2015, nearly 40 lawsuits have been filed against governments that violated UN-mandated goals. One of the cases cited is the groundbreaking judgment by the District Court of The Hague in the Netherlands in May 2021, which held Royal Dutch Shell PLC liable for greenhouse gas emissions. What the IPCC report did was bring fringe litigation to the fore as a credible tool against investments that threaten the environment. Hundreds of complaints have been filed against banks, pension funds and investment funds for failing to disclose climate-risk activities.
The battle against the “Big Oils”
The frontline of the battle is now Europe and the action is centered on the so-called “big oil companies”, the multinational oil exploration and refining companies. TotalEnergies SE has announced plans for a sharp reduction in methane emissions. Methane is considered one of the most harmful greenhouse gases, and the French energy giant aims to reduce its methane emissions by 80% this decade. Last May, stock market investors ejected two directors of Exxon Mobil Corp. considered insufficiently aligned with the threat of climate change. The proposal was put forward by a small fund with a stake of just 0.02%.
However, until banks and investors are willing to finance the development of fossil fuels, the goals of zero emissions by 2050 will be difficult to achieve. Five years after the Paris Climate Accord came into effect in 2016, six US banks – JP Morgan, Chase, Citigroup, Wells Fargo, Bank of America, Morgan Stanley and Goldman Sachs – have lent nearly $500 billion dollars and underwrites with 100 companies, aggressively developing fossil resources. fuel operations.
But opposition has grown from sign-waving agitators to shareholders like “Stop the Money Pipeline” – a coalition of more than 200 organizations and funds. They initiate shareholder resolutions at the general meetings of these American banks and insurance companies. And the chips are stacked against those who refuse to change.
great oil
The frontline of the battle is now Europe and the action is centered on the so-called “Big Oil” – the multinational oil exploration and refining companies
Net zero emissions objective
New corporate initiatives to limit greenhouse gases (GHGs) and phase out fossil fuel industries aren’t exactly driven by philanthropic goals; this is to limit the impending costs imposed by militant litigation
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