A group of investment firms with a total of $20 trillion in assets have urged close to 2,000 companies to set emissions-cutting targets in compliance with global net-zero ambitions.
The target companies together represent as much as a quarter of global carbon dioxide emissions. Those companies are now being pressured to set reduction targets through the Science-Based Targets Initiative, Reuters reports. The move is supported by UK-based nonprofit CDP, which seeks to make environmental reporting and risk management standard practice for the corporate world.
The push for greater transparency in emissions reporting, and specific plans to reduce these emissions, has gathered speed amid the pandemic. Along with government pledges from Europe and China, the business world has also made moves in that direction, the most prominent of which was perhaps BP's ambitious plan to reduce oil and gas production by 40 percent and achieve net-zero status by 2050.
"Climate change presents material risks to investments, and companies that are failing to set targets grounded in science risk losing out - and causing greater damage to the world economy," said the global director of capital markets at CDP, Emily Kreps, as quoted by Reuters.
Banks are also backing this emission-cutting drive by allocating billions for green investments, cutting their exposure to the oil and gas industry, and, in the case of JP Morgan, helping clients align their operations with Paris Agreement targets by reducing their carbon footprint.
In separate news on the topic, a group of asset managers with a combined $5 trillion on assets said this week its members would work towards reducing their investment portfolios' carbon footprint by a sizeable 29 percent by 2025.
Plans of this kind are likely to put additional pressure on oil and gas companies and could be one reason why European supermajors are turning so decisively towards renewable energy while planning to shrink their core operations.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More