Phitrust, along with the investors of the Phitrust Active Investors France fund, has sent written questions to the executive boards of 34 companies listed on the CAC40 index in preparation of their 2018 Annual General Meetings, encouraging their participation in the Science Based Targets initiative.
As a responsible investor, Phitrust believes that it is essential for listed companies to contribute to the commitments made under the Paris Agreement signed in 2015 following the COP21, by agreeing to set Greenhouse Gas (GHG) emissions reduction targets that are ambitious, substantial, compatible with their business activity and in line with the 2-degree emissions target recognised as indispensable by the global community.
The Science Based Targets initiative is an international collaboration launched in the wake of the Paris Climate Agreement of 12 December 2015 by the World Wildlife Fund (WWF), the UN Global Compact, the World Resources Institute (WRI) and the CDP (former Carbon Disclosure Project). The initiative aims to set scientific targets of a company’s GHG reduction potential in accordance with its business activity and in line with the Paris Agreement’s target of limiting global temperature rise to 2°C.
While most major international companies have set targets to cut GHG emissions or manage energy consumption, very few have taken into consideration the need to hold global average temperature rise below 2°C.
In the first quarter of 2018, 362 companies worldwide joined the Science Based Targets initiative, thereby committing to align their quantitative targets with the trajectory of keeping average global warming below 2°C. 96 of these companies have already had their targets approved by the SBT scientific committee.
In France, four CAC40 companies have joined the initiative, having already determined “Targets Set” (targets approved by the SBT and a commitment to cut their emissions – scopes 1 to 3 – with quantifiable data). 13 other companies have committed to the initiative (“Committed Companies”).
With regard to financial institutions (banks and insurance companies), the SBT initiative has stated that it is not yet ready to validate the emissions targets of these institutions (the methodology has not yet been fixed and their footprint is less significant); Phitrust has submitted specific questions to these institutions.
These shareholder questions should foster awareness of the importance of the climate issue on listed companies’ executive boards and encourage them to make objective commitments and submit to science-based target methods and controls, along the trajectory laid out in these major climate agreements.
On the basis of the response to these questions, Phitrust will continue, through the exercise of its shareholder rights, to urge issuing companies to adopt this initiative, steer their governance in this direction and inform shareholders of their results.