Laetitia Tankwe is Adviser to Ircantec President Jean-Pierre Costes; Ircantec is France’s public sector pension scheme. She recently became chair of Climate Action 100+, having served as a Steering Committee member since its inception. In this interview with Steering Committee Coordinator Casey Aspin, she discusses the impact of Climate Action 100+ and of the Paris Agreement.
Q. What will be your priorities during your six-month rotation as Steering Committee Chair?
A. Climate Action 100+ is the largest investor-led climate initiative ever. We have been so busy supporting engagements with 160 companies that we have not done a good job of highlighting all we have accomplished as an initiative at a global level. I think we can do a better job of communicating with signatories so they see the progress we are making and have a better idea of what they are contributing to outside their own engagements. Developing a global perspective on the work we are doing is important not only to signatories but also to policy makers, regulators, NGOs, and other stakeholders. I believe regulators need to understand the support they have from the investment community as they consider climate-friendly policies. We need to leverage the work we are doing to encourage policy makers to be more ambitious and more courageous.
In France, there is a growing trend of citizens and civil society pushing for greater consideration of climate-related challenges. The private sector, including investors, are reinforcing what other stakeholders are saying. As policy makers respond to this pressure, they put policies in place that contribute to a virtuous circle. In the United States, federal policy is going in the wrong direction however many states and cities are taking climate-friendly approaches. Policy development is not linear, there can be temporary gains, a loss, an accident, a loop backwards. I believe the initiative is contributing to a virtuous circle in ways that are not always straightforward.
Q. Has Climate Action 100+ changed engagement with French companies in any way?
A. Engagement is relatively new in France. Climate Action 100+ has given legitimacy to investor action and supported investors who have found it difficult to have a dialogue with companies on environmental issues, which were previously not seen as directly linked to the bottom line. We have built an engagement working group for French investors to leverage the expertise among Climate Action 100+ signatories engaging in our market. There is a range of sector knowledge and analytical skills that can be shared to make engagements as effective as possible. The Paris Agreement has also been very helpful in changing the conversation in France.
Q. How is Climate Action 100+ affecting engagements in other regions?
A. Regionally, the initiative has moved the conversation forward in Asia, where engagement is fairly new. Asian investors have been keen to work with international investors who have more experience engaging in company dialogues. The international investors in turn benefit from the superior knowledge of local investors regarding cultural norms, the regulatory environment, and company history.
Broadly speaking, the initiative has worked on two levels to transform the nature of collaborative engagement. At the company level, gathering like-minded investors behind a clear set of expectations magnifies their influence and makes the engagement process more efficient. Investors will never know as much about a company as its executives when they sit across a table from each other. Working with other investors builds expertise within the team and makes signatories feel more comfortable in these dialogues.
At the regional and global level, Climate Action 100+ engagements benefit from the support of the five regional investor networks behind the initiative. By supporting investors within and across regions, network staff are facilitating knowledge transfer and building the capacity for engagement. They also learn from signatories—it is a two-way street. Recent work on the benchmarking of focus companies is a response to signatory requests for better tools to assess company progress. While Climate Action 100+ is a global initiative, it is flexible enough to address local specifics. For example, filing a shareholder proposal looks very different from one market to another, both in terms of the difficulty of filing and how it is seen by companies. We are learning about these nuances in different jurisdictions.
Q. How does Climate Action 100+ know if it is reaching its goals?
A. We could add up all the commitments to reduce emissions made by Climate Action 100+ focus companies. That gives us a global view on progress, but it isn’t enough. We want to show whether companies are aligned with the Paris Agreement, but we don’t have the data. We have clarified our ambition from “well below 2°C” to 1.5°C in line with the 2018 IPCC paper showing the difference a half a degree makes. Pinning down what that means at the sector- or company-level is theoretical at the moment. We are trying to move toward sector-level actions required to align with a 1.5°C future. The Climate Action 100+ Net-Zero Company Benchmark is moving us in that direction and will evolve as the science evolves.
Q. We are approaching the five-year anniversary of the Paris Agreement. How do you view this
A. The Paris Agreement was driven partly by scientific consensus and partly by the fear of what happens if we do nothing. It was successful in mobilizing civil society and companies. It has been less successful in driving meaningful change by governments. The U.S. announced plans to withdraw and many countries are not sufficiently ambitious; on the other hand, Europe has committed to be carbon neutral by 2050 and China has recently pledged to be carbon neutral by 2060, although we are still learning what that will mean in practice.
I’m positive on the whole. Many stakeholders have gotten involved, youth are demonstrating. And more than 500 investors globally have signed on to Climate Action 100+.
Q. Do you see Climate Action 100+ playing a role in realising the goals of the Paris Agreement?
A. Investors cannot get the job done by themselves but they can do their part. The initiative is fully aligned with the Paris Agreement, which is critical because the agreement is a globally agreed framework. There is not a similar global consensus on how to address human rights or other ESG issues, making it more difficult to engage with companies beyond climate.
Our alignment with the Paris Agreement extends to embracing a just transition, a top priority for Ircantec. We have to take into account the social impact of the transition to low carbon or we won’t succeed. We have a lot of work to do to understand what a just transition means concretely for companies in different sectors, but it is work we must do, just as we must keep pushing for transition pathways on a sector-by-sector basis.
Laetitia’s predecessor, Andrew Gray of AustralianSuper, shared his thoughts in an earlier interview about engaging collaboratively.