Together with other major investors, APG achieves results when it comes to reducing the CO2 emissions of the companies in which it invests. Companies are emerging in almost all sectors that play a leading role in the transition to a low-carbon economy. At the same time, the sustainability strategy of the vast majority of companies is not yet in line with the Paris climate goals.
This is evident from the first progress report from Climate Action 100+, a group of more than 370 large investors to which APG is also affiliated on behalf of its pension fund clients. This initiative, founded in 2017, aims to jointly put pressure on 161 companies that are responsible for the majority of the CO2 emissions worldwide. The participating investors together have $ 32 trillion under management, about a third of all the money invested globally by institutional investors.
Encouraging results
Climate Action 100+ requires companies to provide insight into the climate risks for the company and to take measures to reduce greenhouse gas emissions. Companies must formulate long-term ambitions in line with the Paris agreements (limiting global warming to well below 1.5 ° C) and translate them into concrete, measurable objectives. Some examples of results achieved by Climate Action 100+:
- Shell has formulated long-term goals for reducing CO2 emissions, and will link the remuneration of top management to concrete goals in the short and medium term.
- Heidelberg-Cement and Maersk, the largest shipping company in the world, have announced that they will be fully climate neutral in 2050.
- Rio Tinto mining group has ceased its activities in coal.
- Volkswagen has formulated long-term climate ambitions and will have 70 electric models on the market in 2028.
Within Climate Action 100+, APG is part of the so-called core group of investors who mainly focus on the major oil and gas companies. In addition, APG coordinates the dialogue with companies in the food sector and we are in charge of discussions with Unilever and Nestlé. The latter company recently announced that it wants to be completely CO2 neutral by 2050.
Still insufficient
According to Climate Action 100+, the first results are "encouraging." At the same time, the report states that only 9% of the companies involved are currently doing enough to align CO2 emissions with the Paris climate targets. “Although there are leaders in every sector who adjust their strategy and have the ambition to work climate-neutral, many still have to follow. The task ahead of us remains immense," according to the report.
"The progress we have made with a number of leading companies through Climate Action 100+ shows that we as institutional investors make a difference," says climate specialist Lucian Peppelenbos. “But more companies will have to take steps. Where necessary, we will continue to increase the pressure together with other investors."