Singapore’s sovereign wealth fund GIC has joined a new investor-led engagement programme aimed at driving a transition to net zero emissions in Asian electric utilities by cutting emissions, strengthening disclosure, and improving governance of climate-related risks.
The programme is backed by 13 institutional investors and stewardship service providers, responsible for $8.8 trillion in assets under management.
The 13 investors and stewardship service providers participating in the first year of the programme include: Amundi, BNP Paribas Asset Management, Cathay Financial Holdings, Eastspring Investments, EOS at Federated Hermes, Fidelity International, GIC, Income Partners Asset Management, J.P. Morgan Asset Management, Maitri Asset Management, Manulife Investment Management, Resona Asset Management Co., Ltd. and Sumitomo Mitsui Trust Asset Management.
Companies that are the focus of the programme in its first year include: China Resources Power Holdings (China), CLP Holdings (Hong Kong), Chubu Electric Power Co. (Japan), Electric Power Development Co. (J-POWER) (Japan), and Tenaga Nasional Berhad (Malaysia).
The new programme is coordinated by the Asia Investor Group on Climate Change (AIGCC) and will complement and run in parallel with the global Climate Action 100+ initiative.
Investors are working through the programme to increase the effectiveness of climate engagement with the focus companies through a common agenda, shared objectives, and collaborative effort. Investors commit to engaging with at least one focus company during each year of the initiative as part of a collaborative group.
Asian utilities are responsible for 23% of the world’s total carbon emissions. The average age of coal-fired power plants in Asia is only 13 years compared with an average life of 40 years globally.
“This new programme will complement the current engagement effort of Climate Action 100+ in Asia and assist investors to increase the effectiveness of their work with Asian utility companies to manage and mitigate climate risk,” said AIGCC executive director Rebecca Mikula-Wright.
“Helping these companies reduce their emissions, while strengthening their disclosure and governance standards, will not only advance the sustainability agenda, but ultimately protect and enhance their long-term value. We support AIGCC’s efforts to bring together stakeholders and like-minded partners to share best practices in mitigating climate risk with each other and lead Asia’s transition towards a low-carbon economy,” said chief investment officer for fixed income & chair, sustainability committee of GIC, Liew Tzu Mi.
AIGCC is an initiative to create awareness and encourage action among Asia’s asset owners and financial institutions about the risks and opportunities associated with climate change and low carbon investing.
Last year, GIC joined the Asia Investor Group on Climate Change (AIGCC) and the Climate Action 100+ initiative in a further boost to regional investor engagement on climate change.
AIGCC has 56 members from 13 countries representing over $15 trillion in assets under management.