13 Oct 2020
Berlin (October 13, 2020): A $20-trillion strong group of 137 financial institutions, including Amundi, AXA Group, Crédit Agricole and HSBC Global Asset Management is asking companies to commit to climate action in line with 1.5°C and a net-zero future by setting science-based targets.
The ask is announced today in a new engagement campaign coordinated by CDP, a non-profit which runs the global environmental disclosure platform, sent to over 1,800 of the most high-emitting global companies.
Together, they are the source of 13.5 Gt of emissions (Scope 1+2) each year, equivalent to 25% of total global emissions. Across their entire value chain, the companies have influence over 3x this volume of cumulative emissions.
The group of financial institutions are urging companies to set targets through the SBTi to ensure that they are independently verified against the de-facto industry standard for science-based corporate climate target setting. This enables investors and companies to raise climate ambition that can be measured in a uniform, comparable way.
Given that these companies represent 40% of the MSCI ACWI Index, MSCI’s flagship global equity index, investors and financial institutions are keen to manage exposure to climate-risks in, and de-carbonise, their portfolios.
“The adoption of emission reduction targets by corporates is a critical factor of capital mobilization. Responsible investors want to invest in companies that are transitioning to a Paris-aligned economy”, commented Jean-Jacques Barbéris, Director of the Institutional and Corporate Clients division & ESG at Amundi.
“Science-Based Targets represent a global, robust and helpful tool to support companies on their transition journey. Limiting global warming requires collective response; corporate actions and investors’ mobilization to decarbonize portfolios go hand-in-hand. Supporting CDP for this important initiative is part of our broader engagement to support climate action”.
Over one thousand companies across the globe are already setting science-based targets for reducing emissions, among them over 300 setting their ambition at 1.5°C through the Business Ambition for 1.5°C campaign.
Reducing value chain emissions in line with climate science can increase companies’ resilience and competitiveness, help drive innovation, respond to regulatory adjustments and increase investor confidence.
Laurent Babikian, Director of Capital Markets at CDP Europe, commented:
“We are delighted that so many large European investors recognize the importance for companies to now set science-based targets in line with 1.5°C. By requiring companies to rapidly reduce relevant scope 3 emissions, SBTs are vital for decarbonizing entire value chains".
“Investors need more companies with SBTs to broaden their investable universe and build diverse portfolios in line with the Paris agreement. Now, the next step for creating a virtuous cycle of action is for those investors to set their own science-based targets, to help focus their lending and investment flows and mobilize capital faster towards the companies and technologies leading the transition to a net zero economy”.
Over the last two decades, CDP has created a system that has resulted in unparalleled engagement on environmental issues worldwide with investors and businesses alike. This campaign combines CDP’s track record, and expertise as a founding partner of the SBTi, to use investor authority to take disclosure further. Earlier this month the SBTi released the first framework for financial institutions to set science-based targets for their own operations and portfolios, and is now inviting financial institutions to submit targets for validation.
While companies can set science-based targets at any point throughout the year, investors will be engaging with companies until May 2021, when the impact of this campaign will be evaluated.
Notes to editor
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CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests. Voted number one climate research provider by investors and working with institutional investors with assets of US$106 trillion, we leverage investor and buyer power to motivate companies to disclose and manage their environmental impacts. Over 8,400 companies with over 50% of global market capitalization disclosed environmental data through CDP in 2019. This is in addition to the over 920 cities, states and regions who disclosed, making CDP’s platform one of the richest sources of information globally on how companies and governments are driving environmental change. CDP is a founding member of the We Mean Business Coalition. Visit https://cdp.net/en or follow us @CDP to find out more.
 Based on total emissions in 2018, including from land-use changes such as deforestation (55.3 gigatons): https://www.unenvironment.org/resources/emissions-gap-report-2019. Based on 2019 reported and modelled data.