Climate change is one of the most pressing issues of our time. It intersects all social justice issues – racial justice, environmentalism, gender equality, poverty, and more. As investors, there are several ways that we can do climate investing: corporate climate leaders investing, divesting, and shareholder action. The information below is for information purposes only. We do not provide investment, financial planning, legal, or tax advice. The mention of a corporation in this post is not to be considered an endorsement.
Corporate Climate Leaders
While there is undeniably a climate crisis, there is also a huge window of opportunity for climate leaders to emerge. There are publicly traded corporations that recognize that taking climate action is good for the world and good for their bottom line. Investing in these corporate climate leaders is one option to do climate investing.
Examples of corporate climate leaders in a variety of sectors include:
- Microsoft (MSFT): will be carbon negative by 2030, will remove historical emissions by 2050, and will launch a new $1 billion climate innovation fund.
- Unilever (UL): will reduce to net zero greenhouse gas emissions from all its products by 2039, will invest 1 billion euros in a fund to invest in climate change projects, and will show the carbon footprint of all products on the product packaging.
- A.P. Moller – Marsk A/S (MAERSK-B.CO): will achieve net zero global emissions no later than 2050, will have carbon neutral vessels commercially viable by 2030, an efficiency target of 60% reduction relative to cargo moved by 2030.
The Clean200 are the largest 200 public companies ranked by green revenues. In order to be eligible, a company must have USD revenue of at least $1 billion (most recently available fiscal year-end data) and earn more than 10% of total revenues from clean sources. The 10 American companies that are highest on the list, their rank on the Clean200 list, sector and product examples can be seen in the table below.
|Rank (of 200)||Short Name||GICS Sector||Product Examples|
|3||Alphabet Inc||Communication Services||Fully powered by renewable energy|
|6||HP Inc||Information Technology||Energy-efficient hardware|
|8||Cisco Systems Inc||Information Technology||Energy-efficient hardware|
|9||Tesla Inc||Consumer Discretionary||Electric vehicles|
|17||Intel Corp||Information Technology||Energy-efficient hardware|
|28||Kimberly-Clark Corp||Consumer Staples||FSC and PEFC certified products|
|38||Hewlett Packard Enterprise Co||Information Technology||Energy-efficient hardware|
|47||Ecolab Inc||Materials||Water purification solutions|
|50||Ball Corp||Materials||Recyclable containers|
|51||Sims Metal Management Ltd||Materials||Recycling metals|
The second option for climate investing is to divest. To divest is to sell investments that include bad climate actors. In terms of the greatest emitters of cumulative greenhouse gas emissions in the world, Chevron (CVX) and Exxon Mobil (XOM) rank Numbers 2 and 4, respectively, for investor and state-owned entities. Exxon Mobil, the US’s largest oil and gas company, has also played a particularly large role in influencing public perception about climate change, asserting that there is doubt about the impacts of human-induced climate change.
For the fossil fuel industry to continue to thrive, financiers must fund the projects. JPMorgan Chase (JPM) is the world’s number 1 financier to the fossil fuel industry, by a wide margin. JPMorgan Chase provided $268.59 billion of fossil fuel financing in 2019. Investors can divest from stocks in JPM. In addition, investors can switch to a bank that does not fund fossil fuel projects. One such bank is Aspiration.
The third option for climate investing is shareholder advocacy. Shareholder advocacy is when investors use their rights as a shareholder of a publicly-traded corporation to create change within or for the corporation. This can be done through the use of shareholder resolutions, or proposals, and voting by shareholders. Shareholder voting happens during annual meetings. These are held typically held between April and June.
Nearly 400 shareholder resolutions were filed in 2019, to be voted on in 2020. A list of climate-related resolutions that were voted in can be seen in the below table.
|Chevron||Cut GHG emissions in line with Paris Agreement|
|Chevron||Report on plans to cut carbon footprint in line with Paris Agreement|
|ConocoPhillips||Cut GHG emissions in line with Paris Agreement|
|Dollar Tree||Report on Paris-compliant plan to cut carbon footprint|
|Exxon Mobil||Report on Paris-compliant plan to cut carbon footprint|
|Exxon Mobil||Cut GHG emissions in line with Paris Agreement|
|Home Depot||Report on energy efficiency/renewable energy goals|
|Marathon Petroleum||Report on Paris-compliant plan to cut carbon footprint|
|Ross Stores||Report on Paris-compliant plan to cut carbon footprint|
|Southern||Report on stranded carbon asset risks|
|United Parcel Service||Report on Paris-compliant plan to cut carbon footprint|
|Goldman Sachs||Measure & disclose the climate impact of its lending|
|JPMorgan Chase||Report on oil sands financing|
|JPMorgan Chase||Report on reducing GHG emissions associated with its lending|
|Morgan Stanley||Measure & disclose the climate impact of its lending|