More action by companies to tackle climate change is urgently needed, according to Climate Action 100+.

Publishing its most recent assessment on the progress made by its focus companies, the world’s largest investor engagement initiative on climate change, found some corporate climate progress but was disappointed with the progress to limit the global temperate rise to 1.5°C.

As a result, investors, which includes many pension funds across Europe, are expected to escalate pressure on companies and boards during the upcoming proxy season in the US and Europe, following last year’s record-high majority votes on climate proposals. The next several months will be a critical time for investors to support key climate shareholder resolutions, as flagged by the initiative, that are aligned with the goals of the initiative and the Paris Agreement.

The assessments indicate overall year-on-year improvements in cutting greenhouse gas emissions, improving climate governance, and strengthening climate-related financial disclosures.

Driven by engagement from Climate Action 100+ investor signatories, the results specifically show that: 69 per cent of focus companies have now committed to achieve net-zero emissions by 2050 or sooner across all or some of their emissions footprint, a 17 per cent year-on-year increase. Ninety per cent of focus companies have some level of board oversight of climate change and 89 per cent have aligned with TCFD recommendations, either by supporting the TCFD principles or by employing climate-scenario planning.

However, Climate Action 100+ said it is alarming that the vast majority of companies have not set medium-term emissions reduction targets aligned with 1.5°C or fully aligned their future capital expenditures with the goals of the Paris Agreement, despite the increase in net-zero commitments.

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