The Asia Investor Group on Climate Change (AIGCC), backed by 13 institutional investors responsible for $8.8 trillion in assets under management (AUM), has launched to engage with key Asian electric utilities on cutting emissions, strengthening disclosures and improving governance of climate-related risks.
The new program complements the current engagement efforts of Climate Action 100+ in Asia; utilities in that initiative were not selected. Climate Action 100+ is an initiative led by 575 investors responsible for $54 trillion in AUM to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
In its first year AIGCC will focus on the following companies:
- China Resources Power Holdings (China)
- CLP Holdings (Hong Kong)
- Chubu Electric Power Co. (Japan)
- Electric Power Development Co. (J-POWER) (Japan)
- Tenaga Nasional Berhad (Malaysia).
These companies were selected because they produce substantial greenhouse gas emissions, have large coal-fired power capacity or have a strategic role in driving the net zero emissions transition. The five utilities collectively emitted approximately 285 million tonnes of CO2 in 2019, equivalent to the national emissions of a country like Spain. 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 when compared to an average life of 40 years.
Consistent with guidelines established by the Task Force on Climate-related Financial Disclosures (TCFD), which has been widely adopted globally by industry, key topics for discussion with companies include:
- Strengthening the board’s accountability of climate risk
- Action to reduce emissions across the value chain (including coal phase-out consistent with the Paris Agreement goals)
- Enhancing disclosure
- Identifying physical risks and ensuring companies are supporting policy in line with achieving net zero emissions by 2050