Climate Action Global Investors Driving Business Transition Climate Action Global Investors Driving Business Transition 2O2O PROGRESS REPORT ABOUT THIS REPORT This report is the second update on progress, issued by the Climate Action 100+ initiative. It summarises overall progress of the initiative including an update on measurement and benchmarking, key focus company commitments against the initiative’s goals, growth in signatories, and a sector level update on company performance against a set of indicators aligned to the aims of the initiative. THANKS TO CLIMATE ACTION 1OO+ FUNDERS The five investor networks are thankful for the support of our philanthropic partners: Bloomberg Philanthropies, Children’s Investment Fund Foundation (UK), ClimateWorks Foundation with a contribution from the IKEA Foundation, The Grantham Foundation for the Protection of the Environment, KR Foundation, New York Community Trust — Lise Strickler and Mark Gallogly Charitable Fund, Sea Change Foundation International, Martha Records and Richard Rainaldi, Wellspring Climate Initiative, and our anonymous supporters. CLIMATE ACTION 100+ IS SUPPORTED BY FIVE COORDINATING INVESTOR NETWORKS Notes All values are in USD unless otherwise stated. The reporting period (‘this year’) spans 1 October 2019 - 30 November 2020 unless otherwise stated. For 2019 data, please see the 2019 progress report. 2 CLIMATE ACTION 1OO+ 2O2O PROGRESS REPORT CONTENTS 1 WHO WE ARE 4 WHERE WE ARE MAKING PROGRESS 5 Report introduction and highlights 66 AIGCC-PRI Asia Working Group update WHO WE ARE 1 6 Highlights: 2020 company commitments 68 Ceres North America Working Group update 9 Foreword from Mark Carney 70 IGCC Australasian Working Group update HOW WE MEASURE PROGRESS 2 10 Foreword from the Steering Committee 71 IIGCC Europe Working Group update 11 Executive summary of report findings 73 PRI Global Working Group update HOW COMPANIES ARE PROGRESSING 3 WHERE WE ARE MAKING PROGRESS 4 2 HOW WE MEASURE PROGRESS 5 KEY ISSUES IN 2020 15 The Climate Action 100+ Net-Zero Company 76 Towards net-zero emissions by 2050 KEY ISSUES IN 2020 Benchmark 78 Trade association lobbying in 2020 5 16 Disclosure indicators 79 Just transition 21 Capital allocation indicators HOW WE ARE GOVERNED 6 APPENDIX 7 3 HOW COMPANIES ARE PROGRESSING 6 HOW WE ARE GOVERNED 25 Review of company progress 82 How the initiative is governed 29 Oil and gas sector 86 Priorities for 2021 35 Mining and metals sector 41 Utilities sector 49 Industrials sector 54 Transportation sector 61 Consumer products sector 7 APPENDIX 88 A: Data indicators used in this report LEGEND 90 B: Technical Advisory Group 91 C: Acknowledgements Internal page reference Home Next/previous page (click to go to page) 3 CLIMATE ACTION 1OO+ 2O2O PROGRESS REPORT 1 WHO WE ARE 545 TOTAL SIGNATORIES REPRESENTING SIGNATORY ASSETS UNDER MANAGEMENT TOTAL $52 TRILLION 4 CLIMATE ACTION 1OO+ 2O2O PROGRESS REPORT REPORT INTRODUCTION AND HIGHLIGHTS WHAT IS CLIMATE WHO IS BEHIND THE WHO WE ARE 1 CLIMATE ACTION 1OO+ AT A GLANCE ACTION 1OO+? INITIATIVE? Report introduction and highlights Highlights: 2020 company commitments Launched in 2017, Climate The initiative has been shaped and Foreword from Mark Carney led by its participating investors Foreword from the Action 100+ is now the Steering Committee who determine the engagement largest ever investor Executive summary of report findings 545 16O 2 strategy pursued with each focus SIGNATORY INVESTORS FOCUS COMPANIES IN MARKETS engagement initiative 32 company and update the initiative HOW WE MEASURE PROGRESS 2 on climate change. The on progress. initiative focuses investor The management of the initiative SIGNATORY ASSETS UNDER COMPANIES ENGAGED BY THE INITIATIVE HOW COMPANIES ARE 1 3 engagements on 160 day to day and engagement of MANAGEMENT TOTAL ARE RESPONSIBLE FOR AN ESTIMATED PROGRESSING global companies that have investors is assisted by five investor significant greenhouse gas networks: the Asia Investor Group on WHERE WE ARE MAKING 4 (GHG) emissions and/or Climate Change (AIGCC), Ceres, the PROGRESS are critical to the net-zero Investor Group on Climate Change $52 8O%+ (IGCC), the Institutional Investor OF GLOBAL INDUSTRIAL emissions transition and to 3 KEY ISSUES IN 2020 5 Group on Climate Change (IIGCC) TRILLION EMISSIONS meeting the objectives of and the Principles for Responsible the Paris Agreement. Investment (PRI). HOW WE ARE GOVERNED 6 INVESTOR TOTAL MARKET CAP FOR By engaging with these focus The investor networks provide SIGNATORIES IN ALL FOCUS COMPANIES IS secretariat support for investors, companies, signatory investors APPENDIX 7 to Climate Action 100+ are help facilitate meetings, provide helping to accelerate the business technical assistance and create transition to a net-zero emissions opportunities for engagement skills 32 MARKETS enhancement. The investor networks $8.4 future and ensure that global 4 economies are more resilient to also lead regionally focused working TRILLION climate change. groups that support engagement with a subset of focus companies For more information, visit: and help to ensure engagements are www.ClimateAction100.org and effective. follow: @ActOnClimate100. For more detail on the governance 1 As at 30 November 2020. 2 Represents active engagements in 2019 and 2020, and does not include new additions to the Climate Action 100+ focus list. See page 85 and operations of the initiative for more information about the companies added to our focus list in 2020. please visit the website and the 3 Based on total 2018 emissions for all Climate Action 100+ focus companies (CDP data), compared to 2018 global emissions 2019 progress report. (Global Carbon Project data). 4 Bloomberg data as at 30 November 2020. 5 CLIMATE ACTION 1OO+ 2O2O PROGRESS REPORT HIGHLIGHTS: 2O2O COMPANY COMMITMENTS These highlights are a small selection of company commitments from 2020 WHO WE ARE 1 FOCUS COMPANIES OIL AND GAS Report introduction and highlights 1 Highlights: 2020 BY SECTOR company commitments Foreword from Mark Carney Foreword from the BP ENEOS HOLDINGS INC OCCIDENTAL PETROLEUM PETROCHINA CO. LTD Steering Committee 39 CORPORATION Executive summary of report findings OIL AND GAS COMPANIES BP has set a new ambition to ENEOS updated management plans Occidental Petroleum announced PetroChina announced a near-zero HOW WE MEASURE PROGRESS 2 become a net-zero emissions and company vision for carbon an operational net-zero by 2040 emissions target by 2050, and company by 2050 for scope 1, 2 neutrality by 2040 through its target and ambition for net-zero plans to use some of the $38 billion HOW COMPANIES ARE and 3 with a 50% cut in the carbon updated 'vision for 2040', including associated with the use of its received from gas pipeline sales to 3 23 intensity of products it sells by 2050 aspirations to link social and products by 2050. focus on wind and solar power. PROGRESSING MINING AND METALS or sooner. It also became the first environmental goals to executive COMPANIES oil major to announce that it will cut remuneration and investing 14 billion WHERE WE ARE MAKING 4 production 40% by 2030. into its business transition plan. PROGRESS 31 KEY ISSUES IN 2020 5 UTILITIES COMPANIES HOW WE ARE GOVERNED 6 26 RELIANCE INDUSTRIES REPSOL ROYAL DUTCH SHELL SK INNOVATION CO LTD INDUSTRIALS COMPANIES APPENDIX 7 Reliance Industries announced a Repsol announced an ambition Shell has set a new long-term SK Innovation reconfirmed its target to become net carbon zero to achieve net-zero emissions by ambition to reduce the net carbon commitment to achieving Green 26 by 2035. 2050 for scope 1, 2 and 3 emissions footprint of its energy products by Balance 2030 by 2030, ultimately TRANSPORTATION COMPANIES becoming the first global oil and 65% by 2050, and by around 30% aiming to achieve net zero gas company to assume this goal. by 2035. To reach overall net-zero emissions in all material scope 1, 2 emissions, Shell will pivot towards and 3 emissions by 2050. serving customers that are aligned 14 with its net-zero ambitions. CONSUMER PRODUCTS COMPANIES 1 The focus list includes one company that is classified as ‘other’ which is not included in this list. 6 CLIMATE ACTION 1OO+ 2O2O PROGRESS REPORT HIGHLIGHTS: 2O2O COMPANY COMMITMENTS MINING AND UTILITIES CONSUMER METALS PRODUCTS WHO WE ARE 1 BHP AGL ENERGY LTD PGE POLSKA GRUPA THE SOUTHERN COMPANY UNILEVER PLC ENERGETYCZNA S.A. (PGE) Report introduction and highlights Highlights: 2020 BHP made a significant AGL targeted net-zero emissions PGE published a new strategy Southern Company reaffirmed Unilever announced it would achieve company commitments enhancement in its approach to by 2050 and set out plans to which contained, among other its mid-term goal of a 50% net-zero emissions from all its Foreword from Mark Carney Foreword from the industry associations and lobbying invest more in renewable energies things, a commitment to carbon reduction in GHG emissions by products by 2039 in addition to its Steering Committee on climate to ensure improved and tested the resilience of its neutrality by 2050. The long-term 2030 and set a new long-term goal existing science-based target to Executive summary of report findings climate policy positions from plans against a 1.5°C climate strategic goal of the company is for of net-zero carbon emissions by reduce its scope 1 and 2 emissions associations it is a member of, and pathway scenario. 100% of the energy sold by PGE to 2050. The company complemented 100% by 2030. It intends to establish HOW WE MEASURE PROGRESS 2 to improve real-time disclosure come from renewable sources by this commitment with the report a 1 billion Climate and Nature on misalignment and escalation. 2050. The company will also reduce ‘Implementation and action toward Fund to invest in projects such as The company also set a medium- its investment in coal. PGE also net-zero.’ The goal does not cover reforestation, carbon sequestration HOW COMPANIES ARE PROGRESSING 3 term target to reduce operational set interim targets and milestones.