Aussie firms on climate hit-list

The green pressure group wants the biggest emitters to take action to cut greenhouse gas emissions in line with the Paris agreement.

Australian businesses are increasingly under pressure on climate change as institutional investors use their power to hold companies to account and improve their environmental performance.

The influential Climate Action 100+ investor group has set its sights on three more Australian corporates with LNG producer Oil Search and manufacturers Orica and Incitec Pivot added to its target list while retail giant Wesfarmers was dropped after selling its coal assets.

The Climate Action 100+ initiative controls $US47 trillion ($64 trillion) in global funds and includes Australian investors AustralianSuper, AMP Capital, Cbus, IFM Investors, QSuper and BT ­Financial Group as members.

It added nine companies globally to a focus list where it will hold talks with management to “deliver Paris Agreement-aligned emissions cuts, implement strong climate governance frameworks and improve climate-related disclosures.”

The green pressure group wants the biggest emitters to take action to cut greenhouse gas emissions in line with the Paris agreement of limiting temperatures to well below two degrees above pre-industrial levels.

Oil Search, Orica and Incitec Pivot were added alongside some of the biggest resources companies including Saudi Aramco, the world’s largest oil producer, Mexican energy producer Pemex and India’s UltraTech Cement. The addition of the nine companies takes the global tally to 167, underlining the increasing pressure on polluters to step up their commitment to emissions cuts.

Wesfarmers was cut from the list after it sold out of its coal mines in 2018.

“The changes to the Climate Action 100+ focus list follows a periodic review by the initiative to ensure the companies engaged remain relevant to confronting the global climate change crisis,” Climate Action 100+ said in a statement.

“The recent additions are based on the same criteria for earlier inclusions on the focus list: that a company be a globally significant emitter of greenhouse gases and/or they can play a strategically important role in the transition to net-zero emissions by 2050 or before.”

The move follows Australia’s biggest carbon polluters being targeted in September over their move to net zero emissions by the initiative as part of a move to benchmark companies over their commitment to tackle climate change. Oil Search, Incitec and Orica will not initially be included in the net zero assessment with the focus on engagement to begin with.

Companies including Rio Tinto, BHP, AGL Energy, Woodside Petroleum, Woolworths and Qantas have been called on to commit to net zero emissions and detail strategies for how they will cut pollution, with the climate group to measure performance spread across 30 indicators.

While a slew of corporates including Rio and BHP have committed to net zero emissions by 2050, investors require more clarity on how big polluters shape up and how companies’ medium-term strategies will change to reach their goals. Fifty of the 160 global companies it tracks have already committed to net zero emissions goals.

Australian businesses are increasingly under pressure on climate change as institutional investors use their power to hold companies to account and improve their environmental performance.