SINGAPORE – Six major institutional investors have joined forces to push Asian banks and energy companies to accelerate their transition to decarbonization.
These founding members of the Asia Transition Platform (ATP), which was launched Wednesday, September 29, are putting the weight of their collective assets of $ 4 trillion (S $ 5.4 trillion) under advice or management to drive change.
The platform is coordinated by Singapore-based company Asia Research & Engagement, which provides expertise in sustainability and change and will engage with target organizations on behalf of investors.
These include Asian companies that use and produce fossil fuels, as well as financial institutions, financial regulators and energy regulators.
“Accelerating the energy transition in Asia is essential to tackle the climate crisis, but there is a gap between global investors who want to drive change and Asian companies essential to achieve it,” said Ben, founder and Managing Director of Asia Research & Engagement. McCarron.
In an effort to close this gap, ATP will engage, in its first three years, with at least 50 Asian companies in the region’s major financial markets, the company said.
The initial focus will be on carbon and coal risk in financial institutions and power companies exposed to coal, including those in China such as power generation companies Huaneng and Huadian.
It also intends to use environmental stewardship tools to gradually modify the strategic thinking and governance of the companies with which it engages.
Part of this goal is to promote concrete actions, such as getting Asian electricity and utility companies to roll out plans to align their activities with the goals set in the Paris Agreement, an international treaty on climate change. .
The ATP also aims to get Asian banks to commit to stopping funding for the most carbon-intensive fossil fuels and stopping funding for the expansion of fossil fuels and associated infrastructure.
The platform can also encourage financial regulators to strengthen the regulation of disclosure and risk management, to enable companies to better manage the risks and opportunities associated with climate change.
The six founding members of the platform are BMO Global Asset Management (EMEA), Fidelity International, Dutch pension fund PGGM, UK Forum of Local Government Pension Funds, Aviva Investors and Legal & General Investment Management.
The fact that global investors, such as Dutch pension fund manager PGGM, are on board shows how climate change is a problem that needs to be addressed on a global scale, said Mr Andres van der Linden, responsible investment advisor to the fund.
Mr Mirza Baig, Global Head of ESG Investments at Aviva Investors, said that over the past year there have been encouraging developments in sustainability related business practices and policies, such as a series of ‘zero net ads.
“However, in reality there is still a glaring gap between the current situation and what is needed to ensure that the goals of the Paris Agreement are met,” he said.
âThere is a huge opportunity for Asian businesses to take the lead in tackling the climate emergency. This platform brings together investors dedicated to making the breakthroughs needed to get there. “
Mr. Doug McMurdo, chairman of the Local Authority Pension Fund Forum, also noted that in major developed capital markets, there are typically a number of initiatives that investors can participate in when engaging with financial institutions. companies to drive change.
But in Asia, he said, there are far fewer such opportunities, especially when it comes to financial institutions and power companies in China.
Meanwhile, Ms. Nina Roth, Director of Responsible Investment at BMO Global Asset Management, highlighted the most recent extreme global weather events, which highlighted how an energy transition is in all regions of the world. is essential and must happen even faster than expected.
âIdeally, the Asia Transition Platform will help accelerate this change through increased engagement with businesses and banks across Asia,â she said.