The past few years have seen significant growth in climate change goals from the corporate and investor community. A growing number of companies have pledged to decarbonize their operations and impacts. Similarly, investors are committing to decarbonize their portfolios and have engaged companies on their climate goals and strategies. However, despite investor attention, climate change is still not widely reflected in strategy and performance communications to investors. New findings suggest that companies could do more to bridge the gap between their climate change approach and their long-term value creation strategies. To build investor trust, companies must also communicate how they plan to generate value and stay resilient in a low-carbon future.

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The past few years have seen significant growth in climate change goals from the corporate and investor community. A growing number of companies have pledged to decarbonize their operations and impacts, at least partially. Similarly, investors are committing to decarbonize their portfolios and in doing so, have engaged companies on their climate goals and strategies. However, despite investor attention, climate change is still not widely reflected in strategy and performance communications to investors.

A detailed analysis of the world’s 100 largest companies’ climate and business communications revealed the following[1]:

This research suggests that companies could do more to bridge the gap between their climate change approach and their long-term value creation strategies. To build investor trust, companies must also communicate how they plan to generate value and stay resilient in a low-carbon future.

 


Case Study: bp's New Purpose Reimagining Energy for People and the Planet

31 May 2022

Case Study: bp's New Purpose Reimagining Energy for People and the Planet

Investors want to reward companies that demonstrate their ability to generate value and deliver real-world contributions to tackling climate change. That requires robust, well-rounded transition plans that are integrated with business strategy and a way for companies and investors to engage on those plans. bp outlines how they are engaging shareholders as they transform the company in response to the challenges and opportunities of the energy transition.

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To facilitate this integration, we have created a Climate Transition Conversation Guide, which will help companies develop a consolidated view of their plan to transition to a low-carbon future. Developed in consultation with FCLTGlobal’s corporate and institutional investor members, the guide outlines a series of questions that companies can ask themselves to assess how climate change affects every aspect of their long-term strategy. Elements include:

Companies can use this guide to drive internal conversations and develop a climate transition plan that is integrally linked with their long-term strategy. The guide also serves as a reference for investors who wish to engage with portfolio companies on integration efforts.

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Investor-Corporate Engagement | Toolkit

Climate Transition Conversation Guide

1 November 2021 - Companies are setting net zero and other climate commitments in growing numbers to demonstrate their readiness to take action in the face of climate change. However, meaningful details about how these commitments and even climate change itself will affect corporate strategy are scarce. Such clarity is particularly important for assets, companies, and industries in transition. The lack of clarity is impeding market reactions to climate commitments.

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In the News

Opinion: Climate transition planning is the new net-zero

3 December 2021 - Recent UK government move could have implications for companies far beyond its borders, says Veena Ramani

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Article

Case Study: bp’s New Purpose Reimagining Energy for People and the Planet

31 May 2022 - Investors want to reward companies that demonstrate their ability to generate value and deliver real-world contributions to tackling climate change. That requires robust, well-rounded transition plans that are integrated with business strategy and a way for companies and investors to engage on those plans. bp outlines how they are engaging shareholders as they transform the company in response to the challenges and opportunities of the energy transition.

Learn More

 

[1] See section 3 of this report for the results of FCLTGlobal’s analysis of the top 100 companies in the MSCI ACWI.