Hermes EOS has actively engaged with some of the world’s largest emitters of greenhouse gasses, asking for development of more sustainable long-term business models, reductions in greenhouse gas emissions and improved governance and disclosure.
With the UN Climate Change Conference of the Parties over the next two weeks, we revisit our case study on the progress we have made over 2018-2019 in pursuit of climate-related engagement objectives, first published by the Principles for Responsible Investment in September this year.
Case studies are shown to demonstrate engagement, EOS does not make any investment recommendations and the information is not an offer to buy or sell securities.
Related Insights
Duke Energy case study
In 2010, Duke Energy adopted its first carbon dioxide emissions reduction target – it planned to reduce emissions 17% below the 2005 levels by 2020. The Clean Power Plan (CPP) was finalised in 2015 by the US Environmental Protection Agency, targeting power generation emissions reductions of 32% by 2030 relative to 2005. The Supreme Court stayed the CPP’s requirements in early 2016 and it was never implemented.
Reflecting our engagement requests, Centrica has set ambitious targets for the reduction of the emissions of its customers, which comprise over 90% of the emissions associated with its business, together with a commitment to set a pathway to net-zero emissions by 2050, in line with the goals of the Paris Agreement.
Since the introduction of Japan’s Stewardship Code in 2014 and the Corporate Governance Code in 2015, dialogue between investors and Japanese companies has become more common and the governance of many companies has improved. However, many challenges remain and progress in some areas has been slow.
Shareholder engagement and its effects on target companies
The award-winning study ‘ESG shareholder engagement and downside risk’, which uses engagement data from Hermes EOS, reveals that companies that are successfully engaged by EOS exhibit a lower risk profile, particularly when environmental issues are tackled.
