- Climate Action 100+ is a coalition of investors led by the California Public Employees’ Retirement System (CalPERS) and sustainability nonprofits. Together, the group has more than $US33 trillion in assets under management.
- CA100+ is pushing the corporations that are the largest greenhouse-gas emitters to agree to plans that will lower these emissions, and to be transparent throughout.
- Since launching at the end of 2017, it has had success with energy giants Shell, BP, Glencore, and Equinor, and shipping-industry leader Maersk.
- This article is part of our ongoing series on Better Capitalism.
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At its annual general meeting in May, 99% of BP’s shareholders passed a resolution requiring the oil and gas giant to be transparent about how it’s lowering carbon emissions each year. The request came from Climate Action 100+, a group of 338 institutional investors with more than $US30 trillion in assets under management.
Investors are pushing the world’s largest fossil fuel companies, as well as the world’s other largest greenhouse-gas emitters, to change their policies and become more transparent, with an urgency and momentum that hasn’t before existed at this scale.
“Investors are an important part of this discussion,” Ceres CEO Mindy Lubber told Business Insider. Ceres is a sustainability nonprofit that helped develop CA100+, and Lubber sits on its board. “They’re not the only part, but they’re owners of the company; they’re not campaigners. They don’t want to see the company die – they own the company. They want to see them make smart changes.”
The California Public Employees’ Retirement System (CalPERS) is the United States’ largest pension fund, with around $US360 billion in AUM, and its long been involved in shareholder activism. After the Paris Agreement was drafted in 2015 and signed in 2016 – committing signatory nations to keeping climate change from reaching 2ºC above pre-industrial levels – CalPERS worked with researchers to identify the world’s 100 corporations contributing the most to climate change. California controller Betty Yee and Lubber connected with leaders of three other investor groups to create a global coalition that would compel these companies to gradually transform their businesses before it became too late.
The CA100 launched at the end of 2017, and the “+” was added when they targeted another 61 companies the following July.
The coalition’s board recognised the severity of the climate crisis, but their fundamental pitch could win over the most jaded executives: If you don’t change your business, you won’t have one down the line. There is now a scientific consensus that among the effects of man-made climate change is a massive hit to the economy. The US government’s Fourth National Climate Assessment released in November stated that the US economy will shrink by 10% by the end of the century if the current pace of climate change continues.
The CA100+ will last for five years, but Lubber said that the investors won’t suddenly abandon their goals. The idea was to use the coalition to make a big impression together and let that momentum carry forward.
Lubber said that notable changes since its formation have been Europe’s largest oil and gas company, Royal Dutch Shell, committing to lowering its emissions (including those created by customers using its fuel) with specific targets, as well as breaking ties with lobbying groups not aligned with these goals; mining company Glencore doing the same and also committing to halt expansion of its coal business; energy company Equinor committing to a public annual review of its emissions and how they’re meeting targets; and the leading shipping container company Maersk committing to reaching 0 net carbon emissions by 2050. And then, more recently, was BP’s commitment to transparently keeping its strategy tied to the tenets of the Paris Agreement.
At its annual general meeting, BP’s shareholders rejected a resolution from another climate-centered activist investor group, Follow This. In an op-ed published in the Financial Times the morning of the meeting, BP’s chairman Helge Lund said that his company could not be held accountable for the emissions of its customers – though critics could point out that its rival Shell adopted that very same plan.
Lubber said that while CA100+’s members are motivated by urgency, they are also maintaining a level of patience. “For some of these companies, we’re asking them to radically change what they do as companies.”
It’s a difficult task, but one they consider necessary.
“Whether it’s easy or not is not the question,” Lubber said. “It’s very hard to get there. But it’s a lot harder to imagine the consequences.”