Institutional Investors Reaffirm Support for Climate Action 100+ Following Departures

Following the recent exit of some of the world’s largest institutional investors from the Climate Action 100+, the remaining members of the nonprofit group representing approximately $4.6 trillion in assets have reaffirmed their commitment to the cause.

“We remain deeply concerned about the investment risks posed by climate change to the economy, the markets and our portfolios,” the group said in a statement posted on Climate Action 100+ member California State Teachers’ Retirement System’s website. “Investors encouraging companies to adopt ambitious and thoughtful plans to address climate-related risks aligns with our economic interests as long-term and diversified stewards of capital.”

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Earlier this year, J.P. Morgan Asset Management, State Street Global Advisors, and PIMCO decided to withdraw from Climate Action 100+, while BlackRock transferred its participation in the group to BlackRock International.

“While we are disappointed to see them go, hundreds of investor signatories remain committed to ensuring 170 of the largest greenhouse gas emitters reduce emissions, improve governance, and strengthen climate-related financial disclosures,” the group said in response to the departures,

Climate Action 100+ consists of nearly 700 institutional investors, including CalSTRS, the California Public Employees’ Retirement System, the New York Common Retirement Fund, Canadian pension fund CDPQ, Swedish pension fund AP7, and Danish pension fund ATP, and claims to be the world’s largest voluntary investor engagement initiative focused on climate change. The group says that addressing climate risk is a “fiduciary imperative” and argues that all asset owners and managers have an obligation to protect the value of their assets for their beneficiaries.

“Different types of asset owners and managers may approach addressing climate risk differently, but all should conduct their fiduciary duties with a factual understanding of risk,” the group said. “It is important for all investors to provide clarity and transparency around how they are meeting their fiduciary duty to address climate-related investment risks.”

Climate Action 100+ said its three main messages are that managing climate-related risk requires action by a coalition of governments, businesses, investors and communities; addressing climate risk is a “fiduciary imperative,” and that collaboratively conducting climate engagements enables greater efficiency and effectiveness in managing risks.

“We recognize that there are, and will continue to be, complexities and nuances in the path to achieving a climate resilient future,” the group said. “However, these cannot preclude those committed to addressing climate-related investment risk from taking the action needed to protect the investments that provide security for our beneficiaries.”