Investor sustainability initiative Climate Action 100+ announced the release of a sector strategy to guide investor engagement in order to push for greater ambition on climate actions from airline and aerospace focus companies. The announcement marks the first sector-specific strategy released by the group, with more expected to follow.
Climate Action 100+ is an investor initiative, with over 545 investors representing more than $52 trillion in assets, that targets the world’s largest corporate greenhouse gas emitters to promote taking necessary action on climate change, and align their business strategies with net zero in order to help limit average global temperature rise to 1.5 degrees Celsius. Signatories to the initiative engage with companies to ensure they implement a strong governance framework that takes into account climate risks and opportunities, reduce emissions across the value chain, and increase climate-related financial disclosures.
Air transport has come under increasing scrutiny in recent years as a significant contributor to GHG emissions. According to European Commission estimates, aviation accounts for 2% of global GHG emissions. Without efficiency improvements, aviation emissions are likely to increase along with the steady rise in air travel expected over the next several decades.
Climate Action 100+ stated that the new strategy was developed in consultation with signatory investors, aviation companies, and aviation sector technical experts. It consists of recommended investor expectations to guide engagements with aviation companies and help them align with the goals of the initiative, as well as an in-depth landscape report of the aviation sector and a list of case studies showcasing good practice by aviation companies against the recommended expectations.
Recommendations include calling on aviation companies to set robust targets to reach net zero emissions by 2050, and to specify the extent to which the targets will be met by reducing flight emissions vs reliance on carbon offsets. The strategy also recommends accelerating the adoption of sustainable aviation fuel (SAF), which is generally produced from sustainable resources, like waste oils and agricultural residues, or even from carbon captured from the air, rather than from fossil fuels, and viewed as one of the key tools for the industry to address its emissions impact.
In a blog post introducing the new sector strategy, Marshall Geck, Senior Specialist, Stewardship, Climate Action 100+, said:
“The strategy, which was developed by the PRI, will serve as a major new resource for investors engaging aviation companies on climate change. Investors are encouraged to use the strategy to help aviation companies align with the Climate Action 100+ goals.”