Climate change

climate risk our issues

Why is climate change important for investors?

Climate change is distinctly financial in nature, presenting risks and opportunities for business. There are physical risks and opportunities, associated with rising mean global temperatures, rising sea levels and increased severity of extreme weather events, and transitional risks and opportunities as the economy adjusts to a lower carbon future.

Because of this, ACSI has been engaging companies on climate change for over a decade.  ACSI members are universal, long-term investors managing more than $1 trillion in diverse, long-term investments across the economy.  This means members’ investments will increasingly be impacted by climate change in a way that cannot be diversified away. Long-term investors want to see an orderly transition to a low-carbon economy to reduce the impact on the economy and affected communities.

As a representative of long-term owners, we press for the development of more sustainable long-term business models, reductions in emissions and improved governance.


How do we engage with companies on climate change?

We actively engage with company boards on the way they assess and manage their physical and transition risks associated with climate change.

We recommend the use of the Financial Stability Board’s Taskforce on Climate-related Financial Disclosure (TCFD) and expect disclosure to extend to strategies, metrics and targets to manage risk. We encourage companies to conduct and disclose scenario analysis that considers the transition risks of moving to a Paris-aligned economy as well as the physical risks associated with unmitigated climate change.

We also expect a company’s advocacy activity (including their industry associations’ activities) to be consistent with their policy positions.

Climate change issues are increasingly raised at company meetings. We review each item of business proposed at company meetings, including those proposed by shareholders. We take a case-by-case approach, considering our expectations (as expressed in our Governance Guidelines), information provided by the resolution proposer and information and commitments received from the company through engagement and otherwise. After careful assessment, we make recommendations to our members on exercising their voting rights.


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