Schroders, Pictet Among Investors Calling for Transition Plans
The group wants companies to clearly lay out how they intend to decarbonize their operations and how their capital expenditures will be used to support such efforts.
Ferrari automobiles under production at a plant in Maranello, Italy.
Photographer: Alessia Pierdomenico/Bloomberg
A coalition of investors, including Pictet Group and Schroders Plc, are calling on companies from Ferrari NV to Tesco Plc to move beyond simply setting long-term net-zero commitments to detailing how they plan to deliver on their pledges.
Those asset managers, along with Legal & General Investment Management and BNP Paribas Asset Management, are among 93 investors that wrote to 107 companies asking them to develop so-called transition programs. They want the companies to show how they intend to decarbonize. The plans must include short- and medium-term emissions-reductions goals and provide details about how their capital expenditures will be used to support such efforts.
After several years of engaging with portfolio companies on climate issues, a growing number of investors are pushing for greater specificity on how targets for reaching carbon neutrality by 2050 will impact companies’ finances and operations. And momentum is building behind so-called transition plans with the UK government, the Glasgow Financial Alliance for Net Zero and major banks throwing their weight behind the idea.
The latest campaign, coordinated by the Institutional Investors Group on Climate Change, is intended to extend investor pressure to a wider group of companies. IIGCC helps oversee the Climate Action 100+ campaign, which focuses on the biggest corporate emitters, including big oil companies and miners, and its newest initiative on transition planning covers companies that can be considered the next tier down in terms of emissions.