State Street Global Advisors (SSGA), the third largest investment manager in the world, announced today that it is joining Climate Action 100+, an investor initiative engaging companies and sectors with the highest GHG emissions.
Climate Action 100+ is an investor initiative, with 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.
On a post on the SSGA website discussing the investment management firm’s decision, SSGA President and Chief Executive Officer Cyrus Taraporevala explained that the COVID-19 pandemic has highlighted the impact that systemic risks can have on society, and applies these insights to the threat of climate change. Taraporevala continues:
“That’s why I’m pleased to announce that State Street Global Advisors is becoming a signatory to Climate Action 100+. A global initiative led by investors to foster the clean energy transition by engaging the companies and sectors with the highest greenhouse gas emissions, Climate Action 100+ and State Street have long been aligned, albeit informally to this point. As highlighted in our Annual Climate Stewardship Review, the Climate Action 100+’s three central goals—improving governance of climate change, reducing emissions and strengthening climate-related disclosure—are consistent with what we have been advocating for through company engagements, our thought leadership, and proxy voting.”
Climate Action 100+ has seen significant growth since its launch in 2017, as investors become increasingly aware and engaged on climate issues. Since launch, the initiative has seen a 142% increase in signatories, and in 2020, several of the world’s largest investors joined the group including Invesco and BlackRock. According to Climate Action 100+, the initiatives signatory investors represent nearly half of all managed assets in the world.
Anne Simpson, Managing Investment Director, Board Governance & Sustainability at CalPERS, and member of the Climate Action 100+ global steering committee, said:
“Climate Action 100+ is driving change in the real economy. It is tough and necessary work and we need all hands on deck. We welcome SSGA to the initiative and look forward to working with them and all signatories to accelerate the transition to net-zero emissions by 2050 or sooner.”
Fiona Reynolds, PRI CEO, and member of the Climate Action 100+ global steering committee, said:
“Climate Action 100+ welcomes State Street joining its investor network. Investors as major shareholders have a critical role to play in ensuring that they are acting to address climate risk within their portfolio. Through the initiative, we have shown that it is possible to ensure that companies set ambitious net zero targets, report in line with the TCFD and that at the highest level within a company boards are paying attention and are taking steps to mitigate the climate emergency.”
Climate Action 100+’s focus list of companies targeted through engagement for climate action includes 167 companies that are classified as ‘systemically important emitters’, accounting for two-thirds of annual global industrial greenhouse emissions, as well as companies that can play a strategically important role in the transition to net-zero emissions.
In September 2020, Climate Action 100+ announced the launch of a new benchmark that it will use to evaluate company action and ambition demonstrated in tackling climate change. The initiative also sent letters to the CEO and boards of focus companies, calling on them to put in place net-zero business strategies and define targets to support delivery, and informing them that their companies will be assessed on progress made in becoming net-zero businesses.
The initiative outlined the progress it has made so far with its focus group of companies:
- Climate change governance: 120 companies have now nominated a board member or board committee with explicit responsibility for the oversight of climate change.
- Alignment of value chain GHG emissions with Paris Agreement: 50 companies have indicated they will aim to achieve net-zero emissions by 2050 or sooner.
- Task Force for Climate-related Disclosure (TCFD) reporting: 59 companies have now formally supported the TCFD Recommendations via the official supporter statement.
Emma Herd, Chief Executive Officer of the Investor Group on Climate Change, and member of the Climate Action 100+ global steering committee, said:
“The growth of Climate Action 100+ is testament to the impact the initiative is having globally and further progress that can be achieved as it evolves. We look forward to all signatories, big and small, continuing to be fully engaged with the aims of the initiative and working constructively with focus companies to deliver on the Climate Action 100+ Net-Zero Benchmark.”