For Investors: Covid Adds Urgency to Climate

July 29, 2020

Financial Times: (paywall)

As 2020 kicked off, Dan Gocher at the Australasian Centre for Corporate Responsibility, a shareholder advocacy organisation, was feeling “pretty optimistic” about its plans to force big Australian energy companies to tackle climate change. BlackRock, the $6.8tn asset manager, and other large investors had proclaimed an urgent need to arrest global warming.

With the renewed focus on climate change following the devastating bushfires in Australia, the ACCR was hopeful several climate-related resolutions filed at oil and gas producers Santos and Woodside would gain strong shareholder support at their annual meetings in April. Then came the coronavirus pandemic.

“Once the virus hit, we said ‘God, we won’t get anything done [on climate change] for 18 months’,” says Mr Gocher. Like many others, Mr Gocher feared investors would swiftly retreat from recently made climate pledges as markets plummeted.

Critics had long argued that the fund industry’s nascent love affair with environmental, social and governance investing was in reality a marketing ploy that would be dumped at the first sign of trouble.  Instead, in spite of the pandemic, 2020 has proved to be a landmark year for investor action on climate change, with significant resolutions being passed and investment pouring into sustainable funds. With both regulators and clients increasingly calling for change, asset managers are now broadening their remit beyond energy-intensive industries such as oil.

Rather than drive investor attention away from climate change, the pandemic has cemented interest, with many investors fearing the economic fallout seen during the pandemic could be replicated if the world fails to halt global warming, says Mirza Baig, global head of governance at Aviva Investors.  Until the virus, “there was still a significant portion of the investor base” that believed tackling climate change “could wait until tomorrow”, he adds. “That has changed. Companies and investors are starting to look at the importance of acting now.”

At Santos, 43 per cent of shareholders supported a resolution to require the energy company to set targets in line with the Paris agreement to tackle climate change — the first time a targets-based resolution had received such a high level of support in any country.

More than half of shareholders voted in favour of a similar motion at Woodside a few weeks later. “We were very much surprised by the support,” says Mr Gocher.

In Japan, 35 per cent of shareholders supported the country’s first-ever climate change proposal at Mizuho Financial, calling on the banking group to disclose a Paris agreement plan.

In the US, a resolution calling on Chevron to disclose its lobbying on global warming passed, while almost half of shareholders backed a climate proposal at JPMorgan, the US bank.

3 Responses to “For Investors: Covid Adds Urgency to Climate”

  1. Keith McClary Says:

    “At Santos, 43 per cent of shareholders supported a resolution to require the energy company to set targets in line with the Paris agreement to tackle climate change —”

    Here is what their site says:

    “We aspire to achieve net-zero emissions from our operations by 2050, in line with global ambitions to limit temperature rises to well below 2°C.”

    “Aspire” is a favorite word with polluting corporations, right up there with “Thoughts and Prayers”. Are they going to use solar/wind power to drill their oil/gas wells?

    • Brent Jensen-Schmidt Says:

      And sometimes they actually believe that they will do it, eventually. One positive action, no matter how small, is worth more than the grandest good intention.

  2. Keith McClary Says:

    Another covid-climate connection:

    “Video: Slowing deforestation is the key to preventing the next pandemic – but what does that cost?”

    “… measures to reduce the likelihood of future pandemics, many of which originate with wild animals such as bats. They argue that spending billions of dollars per year—a fraction of the cost of pandemics—on programs that reduce deforestation would curtail wildlife trade and support the communities that live on the forests’ edge.”

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