Carbon Action Initiative

The project accelerates company action on carbon reduction through the use of investor pressure, thereby enabling sustainable business models and reducing the environmental footprint of companies all over the world. This initiative works within the existent system to alter the carbon footprint of the world’s highest emitting companies. Investors see benefits in setting climate friendly targets and investing in emissions reduction projects, and the Carbon Action Initiative helps investors advance their understanding of portfolio company carbon management and act according to fiduciary duty.

Fast facts:

In 2014, 304 investors with US$22 trillion in assets under management were part of this initiative and asked the world’s highest emitting companies to take action in response to climate change. In particular, they ask companies to: make emissions reductions, publicly disclose emission reduction targets and make investments in sustainable projects and activities.
In 2014, 224 companies in heavy-emitting industries invested significantly in emissions-reduction projects and setting emissions targets due to Carbon Action Initiative:
o 79% of companies reported emissions-reduction targets.
o 25% set absolute and intensity targets.
o Last year, only investments in emissions-reduction projects have increased by 18%.
o This led to immediate overall emissions reductions of 8%.

The problem

Large industries and companies can be heavy-emitters of greenhouse gases. Industries and companies have the technology and financing to be more sustainable, but often do not utilize them. Companies also hold back from climate smart investments due to lack of inertia or lack of awareness.

The solution

Through a series of checks and balances, investors hold companies accountable for their emissions and demand that these companies and industries take action in response to climate change. The Carbon Action Initiative focuses on companies determined by the industry sector to be at a high level of greenhouse gas emissions.

Helping the planet

The Carbon Action Initiative is inherently about climate smart investment. It helps investors all over the world advance their understanding of portfolio company carbon management and energy efficiency initiatives and improves risk management in regulation, operations, judiciary duties and reputation. As more companies invest in carbon reduction and energy efficient activities (thus developing more sustainable business models), investor’s portfolios will become climate-smart. This initiative also helps companies utilize market opportunities from climate change and generate positive returns through carbon reduction and energy efficiency projects, building long-term sustainable businesses.

Helping people

The primary beneficiaries of the Carbon Action Initiative are investors and companies all over the world, but ultimately people all over the world as the initiative ensures significant emission reductions and works toward staying below 2oC global warming.

Scaling Up

Investor support for this initiative has grown from 35 investors in 2011 to 254 investors in 2014. In 2011, just 205 companies were committed to reducing greenhouse gas emissions and in 2014, 322 companies were on board. A strategic plan has been developed which will see the Carbon Action Initiative expand even further over the next 5 years. Future developments include:

• Increasing the number of companies targeted.

• Increasing investors actively engaging with companies.

• Creating sector specific letter requests to drive more effective carbon mitigation.

• Creating sector specific analysis for investors to enhance engagement value and impact.