As part of its Net Zero pledge, CalPERS has doubled its commitment (from $47b to $100b) to investments in companies with progressive carbon emissions plans.
CalPERS will exit its investment in companies that do not have a credible (ie, certified/verified/progressive) net zero plan – “We believe in engaging with these companies,” said Peter Cashion, CalPERS’ managing investment director for sustainable investing. “But we will make it clear that refusing to move toward climate solutions puts our investments at risk, which is counter to our fiduciary duty.”
CalPERS is not the only investor making this move. 40+ funds have already made the pledge, with more joining.
Why does this matter to you?
- A company can achieve carbon neutrality via carbon emissions it controls – ie, the carbon emissions produced directly by the operation of its business and the carbon emissions produced by the local utility provider, producing the energy for the business – called Scope 1 and Scope 2 emissions.
- But when a company makes a Net Zero pledge, as CalPERS and many many many other organizations have done and are doing, it includes Scope 3 (17 items including vendors).
- Therefore, for companies to not be sold by CalPERS, and for a company to ever be a candidate in the future for investment by CalPERS, they will need a carbon emissions plan that includes their suppliers (ie, your company).
Has your company received its first Scope 3 letter from an investor or client, noticing you that action will be needed for you to continue with them?
Have you thought about being proactive and using this as a way to take market share and improve your attractiveness to investors? If not, might want to give it some thought.
Watch this master class and contact us, if you would like to help the planet while positioning your company for the change that is already here.