A coalition of investors, including Pictet Group and Schroders Plc [SDR:LN], have urged influential companies such as Ferrari NV [RACE:US] and Tesco Plc[TSCO:LN] to detail how they will fulfill their climate targets instead of simply setting long-term net-zero commitments, as reported by Bloomberg on March 27. The two asset managers, along with Legal & General Investment Management and BNP Paribas Asset Management [BNP:FP], are among 93 investors that wrote to 107 companies asking them to develop transition programs. The programs must include short- and medium-term emissions-reductions goals and specified plans on how they will allocate their capital expenditures to achieve these targets. 

The move reflects a broader trend that a growing number of investors are pushing for greater specificity on how climate targets will impact companies’ finances and operations. The Climate Action 100+ initiative, launched by five regional investor networks and overseen by the Institutional Investors Group on Climate Change (IIGCC), is driving this trend. With USD68tr in assets under management, the investor-led initiative is encouraging companies to enhance climate change governance, reduce emissions, and improve climate-related financial disclosures. Adam Matthews, Co-chair of the IIGCC corporate program, stated that enterprises should see transition planning as a chance to tell their story and build investor confidence in their ability to manage a complex transition. Moreover, by formulating transition plans, enterprises can identify areas where they require financial support to achieve decarbonization, and investors can provide assistance accordingly, Matthews added. 

Sources:

https://www.bloomberg.com/news/articles/2023-03-26/schroders-pictet-among-investors-calling-for-transition-plans?srnd=green#xj4y7vzkg

https://www.climateaction100.org/about/

https://www.iigcc.org/media/2019/03/Investors-expect-power-companies-to-show-they-are-%E2%80%98fit-for-the-clean-energy-future%E2%80%99.pdf