By Jessica DiNapoli
NEWYORK – A coalition of investors with more than $60 trillion in assets under management is preparing to call on electric utility companies globally to move up their timeline by as much as 15 years to bring their net greenhouse gas emissions to zero.
Utilities account for about 40% of emissions worldwide, more than any other sector. Many of them have committed to reach net-zero emissions by 2050, a target that scientists say must be met to avert global warming of more than 1.5 degrees Celsius.
Net zero refers to reaching a balance between the greenhouse gases put in to the atmosphere and those taken out.
The Institutional Investors Group on Climate Change (IIGCC) in London, part of the Climate Action 100+ initiative, told Reuters on Tuesday that emissions from electricity generation need to reach net zero well before 2050, so that other industries that rely on power can follow suit.
In a report to be published on Wednesday, the IIGCC will call on utilities in developed economies to reach net zero emissions by 2035 and in developing countries by 2040. It will ask them to outline a detailed strategy to get there.
“It’s quite urgent they decarbonize,” IIGCC‘s chief executive, Stephanie Pfeifer, said in an interview. “We really need to know how they are going to implement the vision over the long term.”
Pressure is building on companies and governments to do more to tackle climate change ahead of the COP26 United Nations conference https://www.reuters.com/business/environment/cop26-glasgow-who-is-going-who-is-not-2021-10-15 in Glasgow, Scotland, later this month.
Companies that do not respond to the IIGCC‘s outreach could face shareholder resolutions and votes against corporate directors, according to the report.
The outreach has already begun by individual IIGCC members. Wespath Benefits and Investments, with roughly $29 billion in assets under management, has been urging WEC Energy Group Inc to move up its net zero deadline to 2035, said Jake Barnett, director of sustainable investment stewardship at the Glenview, Illinois, faith-based investment firm.
Milwaukee-based WEC has already said it plans to cut greenhouse gas emissions by 80% by 2030.
“We have set some of the most aggressive near term emissions goals in the utility industry,” said Brendan Conway, WEC‘s media relations manager. “We will continue to support achievable goals that keep our customers and communities safe.”
Barnett said Wespath will continue to engage with WEC on the 2035 net zero target.