Climate change, stranded assets, and the transition to a low carbon economy pose significant risks and opportunities for institutional investors. Current trends, including the recent oil price collapse, falling renewables prices and clean energy technology innovation, magnify these risks and opportunities. Ceres encourages investors to take action on climate and carbon asset risk, using the strategies that the investor deems appropriate, which can include shareholder engagement and filing shareholder resolutions, full or selective divestment, reducing portfolio carbon intensity, investing in climate solutions, policy advocacy, or some combination these strategies. Ceres believes multiple strategies are necessary to achieve the systemic changes necessary to mitigate these risks.
Although Ceres encourages investors to address climate risks through multiple approaches, this memo, provided at the request of a number of investors, compiles examples of productive shareholder engagement with fossil fuel energy companies on climate and related environmental, social and governance (ESG) issues. Before describing these results it is important to acknowledge that leading investors are not satisfied with the pace or scope of changes to date by the fossil fuel industry to address climate change. These investors continue to actively seek ways to boost the impact of their engagement strategies to achieve the shift to a low carbon economy within the time frame scientists say is needed.