AVIVA TO VOTE AGAINST COMPANIES THAT DO NOT REVEAL THEIR CLIMATE RISKS
Aviva Investors has warned more than 1,000 companies globally that they face shareholder backlash at their annual meetings next year if they fail to publicly disclose the risks posed to their business models by climate change. The UK fund house, which oversees $437bn of assets, said it will vote against the annual reports and accounts of companies that fail to embrace recommendations set out last month by the task force for climate-related disclosure' (FTfm, 20 Jul)
'Aviva is the first asset manager to publicly say it will vote against businesses that do not report in line with the climate change recommendations. The fund company’s move is the latest sign that investors are increasingly concerned about the impact of climate change on returns. ... Aviva will consider selling its shares in companies that repeatedly fail to provide information on the impact of climate change on their business models.'
ARE ASSET MANAGERS STEPPING UP ON CLIMATE DISCLOSURE?
In an article for ESG Magazine, Preventable Surprises Raj Thamotheram and David Murray ask why 'Some of the biggest names in the investment world backed the TCFD work with people and resources, but their management didn’t sign-on to the outcome' (The mystery of the missing CEO signatories to the TCFD report):
"A close comparison of the impressive list of companies that supported the Task Force (notably, with considerable staff time) to the stellar roster of 103 companies whose CEOs signed a letter in support of its recommendations reveals some curious discrepancies. In the financial sector, for example, missing from the CEO signatories were BlackRock, Banco Bradesco, JP Morgan and Mercer. ...
Preventable Surprises would have preferred the TCFD to go further and encourage investors to also assess how companies affect warming, not just how they are affected by it, and to this end we back AGM resolutions asking for transition plans. Our particular focus is on the energy utility sector, and in 2018 we hope to heave shareholder votes over the 50% mark, as happened this year with PPL Corporation. ...
Our hope in writing this piece is that the missing leaders hear the disappointment from their clients, staff and trusted peers loud and clear, and then correct their mistake quickly. Learning from failure needs to become a core skill for top management in this sector. Mis-managed climate change systemic risk offers the perfect opportunity." The group make a similar point in a letter to the editor in the Financial Times.
The article is part of a special in-depth issue reporting on the final guidelines of the TCFD, including articles on What does the future hold for scenario analysis, The EU has the TCFD firmly in its plans for a sustainable Capital Markets Union, and a look at what will happen to the 400 different frameworks for climate reporting the TCFD unearthed.
IN OTHER NEWS...
What’s the real impact of President Trump’s move to pull the U.S. out of the global accords to combat climate change? "To put it simply, very little changes", say Morgan Stanley. "Economics and improving technologies, not regulation, are the driving forces behind many of the sustainability trends in global markets today."
News from UK:
News from Europe:
News from around the world:
Sri Lanka’s electricity regulator has ruled out building new coal plants for the next two decades after finding the environmental and social costs of the fuel made it uneconomical. (Climate Home, 4 Aug). ReNew Economy call it a 'dramatic U-turn' as in its previous plan the regulator 'pitched for the construction of 11 new coal units with a combined capacity of 3200 MW by 2034.'
Saudis Seek Bids for First Utility-Scale Plant for Wind Power: 'The government has announced plans to offer tenders for renewable energy projects to generate 700 megawatts this year.' (Bloomberg, 16 July).
Will the capital markets eventually stop subsidising shale producers? John Dizard argues that 'the US exploration and production industry for oil and gas has developed great technology, but it has required continuous transfusions of cheap outside money to keep going. The tide of cheap shale oil and gas will recede only when the capital markets stop wiring funds to the producers.' (The argument to be a buyer of the Saudi Aramco IPO, FTfm, 22 July)
Argentina, next G20 hosts, urged to continue with topic of green finance in 2018, by Ma Jun, chief economist at the People’s Bank of China (PBoC) at a meeting in Buenos Aires. (IPS, 26 July)
And finally... Schroders climate progress dashboard published. The dashboard reported by the FT (and in my last Chronicle), has been published, showing that "Least progress has been made on oil and gas production, which points to a rise of over 6°C, implying major changes will be needed to hit long term targets. Use of these fossil fuels will have to fall significantly in future, ultimately to zero." The 12 indicators are below, and dashboard is on Schroders website:
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