There has been a recent wave of net zero emissions commitments from large corporate emitters. Whilst this is positive progress, companies have a long way to go in delivering these ambitions. In particular, specific short-term actions are urgently needed to reduce emissions in the next decade, in order to meet longer term climate goals. The world is entering a “decisive decade” where emissions must decrease substantially if the planet (and investor portfolios) are to avoid some of the worst impacts of climate change. The IPCC’s Special Report on the Impacts of Global Warming of 1.5°C calculates that a 1.5°C global warming trajectory will require a worldwide reduction in greenhouse gas emissions of about 45 percent by 2030 (relative to a 2010 baseline), and net-zero emissions by 2050.
For many sectors, particularly those considered “hard to abate”, the pathways to decarbonisation are not always clear and straightforward. In some cases, the technologies required for the transition are still in their infancy. There is a shared need by investors, companies and other stakeholders to understand what net zero pathways for certain sectors look like and what actions and interventions are required for them to be achieved in each different timeframe.
Investors recognise that unprecedented cross-sector collaboration is required to achieve net zero across the global economy – and that companies need the support of investors, among other stakeholders, to make these significant shifts.
To help fill these gaps and to accelerate sectoral decarbonisation, a new workstream of Climate Action 100+ has been launched: Global Sector Strategies. Through this, Climate Action 100+, its investor networks and signatories will map the transition for a number of key sectors, identify priority actions for the three major stakeholders – companies, industries and investors – and track company implementation progress through engagement.
By coordinating sector-wide engagement, which will inform investor expectations on company transition plans and recommend interim actions to accelerate progress, investors are helping companies to transform industries at the pace and scale required to deliver their net zero goals.
How are the strategies developed?
The Global Sector Strategies are developed by the investor networks that coordinate Climate Action 100+ – AIGCC, Ceres, IGCC, IIGCC and PRI. Each strategy is led by the investor network with the most strategic knowledge of the sector, in consultation with the other coordinating investor networks, Climate Action 100+ signatories, external experts and focus companies.
During the research phase, the lead investor network will assess existing scenarios, consult a range of diverse stakeholders, including the Climate Action 100+ focus companies, and publish a set of global recommendations for companies, industries and investors. Each investor network will work with its signatories to distil those into specific short-term, industry-wide and regional actions that they can request from focus companies in each region.
During the implementation phase, this sector-specific requests will enhance existing investor engagement with the initiative’s focus companies in each sector and region. Investors will meet with the industry twice a year to pursue the implementation of these actions.
Global Sector Strategies for Aviation, Steel, Food & Beverage and Electric Utilities have been published and can be found below. The following Global Sector Strategies will be published in the coming months: Trucks and Diversified Mining.
For more information on the process behind this workstream, please download this presentation.
