Mark Atkinson, Head of Marketing and Investor Relations at Alliance Trust, said: “An example of our pragmatic approach is BP. It is highly ranked among peers in terms of ESG risk, investing in renewables and looking to improve its reporting and transition risk management. A shareholder resolution tabled by Climate Action 100+ aims to ensure BP provides better climate-related reporting and aligns each new material capital investment with the goals of the Paris Agreement on climate change, so we expect better disclosure and, over time, a shift in BP’s fuel mix towards lower carbon intensity.
“Another example is HeidelbergCement, which produces and distributes cement worldwide, emitting significant amounts of carbon. The company has implemented numerous projects towards the goal of reducing its carbon footprint, including carbon capture and storage methods, recycling absorbed CO2 into marketable building materials, and using CO2 for algae cultivation. In addition, HeidelbergCement employs a region-specific biodiversity protection and quarry rehabilitation approach.”
Zehrid Osmani, Manager of Martin Currie Global Portfolio Trust, said: “We would single out a few companies such as industrial gases leader Linde. It is targeting a 35% cut in absolute emissions by 2035 and is a major player within the hydrogen value chain as an alternative energy source. Linde provides energy solutions to its customers through its on-site industrial gas plants, which help its customers to reduce their own carbon emissions. We would also single out companies such as Nemetschek and Autodesk in the technology sector. Through their IT software offerings, they help improve project management and therefore reduce waste in the construction sector. Construction is a sector that we believe consumes more than half of all extracted raw materials globally and accounts for more than 36% of the waste generation in Europe alone.
“Within the consumer space, cosmetics company L’Oreal is a noticeable leader. They have committed to all their sites being carbon neutral by 2025 with 100% use of renewables and improving energy efficiency. They are also building sustainability into their innovation, with products whose use will reduce CO2 emissions by 25% per finished product in 2030 compared to 2016. In addition, they are driving change in their supply chain with the goal to reduce their strategic suppliers’ scope 1 and 2 emissions by 50% in absolute terms by 2030 compared to 2016. Outside of these goals they have many others covering reduced water use, lowering the footprint of packaging, and increasing the use of biobased ingredients.”
Opportunities in climate change
Matthew Tillett, Portfolio Manager of the Brunner Investment Trust, said: “Decreasing the global economy’s reliance on fossil fuels is an essential part of combating climate change. Doing so will be a multi-decade process that will involve not only investment in renewables, but also the infrastructure to transmit electricity, build energy storage, improve efficiency in existing systems and offset the impact from continued fossil fuel consumption. By its nature this is a highly capital-intensive project requiring trillions of dollars in investments across many different industries. The energy transition therefore offers one of the clearest opportunities for us as investors, given both the timescale and breadth of solutions necessary.”
