Asian companies reach ‘tipping point’, more readily engaging on climate change: Climate Action 100+

Nearly half of 160 monitored companies globally have committed to zero emissions by 2050
In Asia, 30 investors now support the global initiative, investor group says

Banking & finance

Chad Bray

Published: 2:01pm, 17 Dec 2020

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Asian companies are more readily engaging with investors on climate change and making commitments to reduce their emissions in line with new carbon-neutrality pushes this year by governments in China, Korea and Japan, according to investor coalition Climate Action 100+.

Nearly half of the 160 companies monitored globally by the investor coalition have adopted zero-emission commitments by 2050, with 51 per cent committing to short-term emissions targets in the next five years, the group said.

Awareness by companies and investors of the need to address climate change has reached a “tipping point” in Asia, according to Rebecca Mikula-Wright, executive director of the Asia Investor Group on Climate Change.

“Awareness of climate impact in the region, the impact on people’s lives [and] the evolution in China [is driving change] – the recognition that the officials and everybody else breathes the same air,” Mikula-Wright said.

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Climate Action 100+ counts 545 global investors holding about US$52 trillion in assets under management who have signed up to the initiative.

The number of Asian investors who have joined the coalition increased to 30 this year, from 18 a year ago, Mikula-Wright said. New signees this year include Ping An Insurance and Singapore sovereign wealth fund GIC.

“As a long-term investor, we seek to ensure our portfolio companies are aligned with the transition to a more sustainable path,” Liew Tzu Mi, chair of GIC’s Sustainability Committee, said in a statement announcing its membership last month. GIC identifies companies exposed to climate change and engages with them to mitigate or transition from that risk.

Big institutional investors, as they face pressure from clients, are taking a more active role in pushing for companies in their portfolios to address climate change.

Blackrock said last week that it would support more shareholder proposals on climate change and social issues as it tries to use its dominance as the world’s biggest asset manager to enact change, including voting against directors where it believes companies are not moving fast enough.

For example, the company said it would push for greater ethnic and gender diversities on corporate boards.

One reflection of changing attitudes in Asia is the number of governments that have adopted aggressive goals to address emissions this year.

In September, Chinese President Xi Jinping said in a video address to the United Nations General Assembly that the country would scale up its voluntary emissions targets under the Paris climate accords, hitting peak emissions before 2030 and achieving carbon neutrality before 2060.

Chief Executive Carrie Lam Cheng Yuet-ngor pledged Hong Kong would be carbon neutral within three decades as part of her policy address. Photo: Felix Wong

Japan and Korea also have announced their intentions to be carbon neutral a decade earlier by 2050. Last month, Chief Executive Carrie Lam Cheng Yuet-ngor pledged Hong Kong would be carbon neutral by 2050 as part of her annual policy address.

But there is a long way to go.

About 98 per cent of the 142 Chinese companies whose climate risk disclosures reviewed by Legal and General Investment Management failed to meet even half of its minimum standards, the London-based firm, which manages around US$1.5 trillion of assets, said this week.

Mikula-Wright said the next 10 years are a “transition decade” and a critical period for companies and countries to address climate issues.

The coronavirus pandemic also has heightened the awareness of climate change this year.

“Looking at the clearer skies in Delhi or Beijing and all around the world – a picture of what it could be like – … It’s accelerated the desire from corporates and investors who live wherever they live to bring change about,” Mikula-Wright said.

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