Pressure grows on companies over climate change

Global asset managers Fidelity International has said it will hold company directors to account next year if they fail to deliver on issues of climate change and boardroom gender diversity, according to a report in the Financial Times.

Fidelity, which oversees more than $750 billion in clients' assets and employs 8,400 people worldwide, says that it will be prepared to vote against the re-election of board members from next year if their companies are deemed to be making insufficient progress on board diversity or global warming.“Ultimately boards need to be held accountable,” said Jenn-Hui Tan, global head of stewardship and sustainable investing at Fidelity International. “It is their responsibility.”The move came as Al Gore, the former US vice-president who now chairs sustainable investment management firm Generation Investment Management, warned of the "rising threat" of 'greenwashing', where companies give the impression of adopting policies to protect the planet but actually do little practically to achieve it.He said consumers were facing "confusing and often misleading claims about sustainability benefits" as GIM published its annual sustainability trends report.Mr Gore said this was "the most crucial decade of climate action" but warned of a "yawning gap" between long-term climate change goals and near-term action plans.Large emitters must "increase their climate ambitions with renewed credibility and urgency", he said, adding: "Likewise, developing countries urgently need substantial support on vaccine access, climate finance and debt relief."A lack of progress on these fronts risks undermining progress in tackling the climate crisis and in facilitating a just and equitable recovery. We must be vigilant of the rising threat of greenwashing or risk derailing hard-won progress."
The warning came as scientists on the UN's Intergovernmental Panel on Climate Change (IPCC) began a virtual, two-week meeting to finalise the most comprehensive assessment on the state of global heating since 2013 to present to 195 governments ahead of November's COP26 climate summit.It is anticipated that the 40-page 'Summary for Policymakers' will be a "wake-up call" to government leaders when they meet in Glasgow in a bid to agree global policies to tackle climate change.UK government minister Alok Sharma, who will preside over the COP26 summit and who chaired a meeting of climate ministers from 51 nations in London over the weekend, said that although countries were now aligned more closely on many issues, they were still "not yet close enough" on others.The phasing out of coal for power generation remained a major contention, with Mr Sharma stressing its continued use was incompatible with achieving key climate targets."I sense this sense of common endeavour, and a shared desire to address the climate crisis before us," said Mr Sharma."I do think we made progress over these two days, however the issues we discussed are complex, and there are still significant differences that persist. We have moved closer together over the past few days, but still on these vital issues, we are not yet close enough."Last week, when G20 environment ministers met in Naples, China and India stood out against the elimination of coal despite widespread support from most other nations.And last month, a report from UK's Climate Change Committee (CCC), which advises the government on environmental policy, said that, despite historic climate commitments, ministers had been too slow taking effective action.The CCC said, for instance, that the UK’s ten-point plan for a “green industrial revolution” was an important statement of ambition, but so far had not been backed by firm policies. It added that the UK had often missed the mark with the strategies that had emerged and that, with every month of inaction, it would be harder to achieve net-zero goals.Commenting on the report, Rain Newton-Smith, chief economist at the Confederation of British Industry (CBI), said: “The committee’s report rightly demands that the UK’s net-zero ambitions are matched by world-leading action. The climate crisis is worsening and currently we’re way off track. Gaps in the policy landscape must be filled with urgency.“With all eyes on the UK for COP26, it’s important the UK steps up and shows leadership - we can only inspire global action through domestic progress.  That means delivering a plan to drive forward the UK’s net zero transition and unlock fresh investment.“The government has outlined its ten-point plan to net-zero and the CBI have filled in the details in order to deliver on this. We’re urging support to homeowners and landlords to retrofit millions of buildings to increase energy efficiency, leverage our strength in green technologies, and speed up plans to roll out charging infrastructure for electric vehicles."

Read more news and views from David Sapsted.

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