Understanding Carbon

Investors’ Vital Role in Curbing Greenhouse gas Emissions

100 big companies are responsible for 71% of all greenhouse gases: can this be changed?1

In daily life, we’re increasingly aware of the need to reduce our carbon footprint- perhaps by taking the train instead of flying when travelling.

Since 1988, 100 big

companies have been responsible for 71% of GHG emissions.1

The path of these carbon majors will be essential to meeting a 1.5 degree target.3

Asset managers have a vital role to play by financing those with an ambitious transition path and engaging with laggards.


But these individual reductions aren’t enough on their own. Governments and industry need to be part of the change too.  A 2017 study found that just 100 big companies were responsible for a staggering 71% of industrial greenhouse gas (GHG) emissions – roughly 635 billion tonnes - since 19881. And this is not just a recent, or even a twentieth-century phenomenon. In fact GHGs can date back to the industrial revolution in occidental countries in the 1750’s. The historic impact of these companies on global heating is vast, the study found: over half (52%) of all global industrial GHGs emitted since the start of the industrial revolution in 1751 have been traced to these 100 fossil fuel producers1.

Looking at numbers on this scale, it’s easy to feel powerless. But if change is to happen, investors can have a vital role to play.  A report compiled by the CDP (Carbon Disclosure Project), a not-for-profit charity, states that almost a third (32%) of historic emissions come from publicly listed investor-owned companies1. ‘Investors in fossil fuel companies own a great legacy of almost a third of all industrial GHG emissions today…. That puts a significant responsibility on those investors to engage with carbon majors… and set ambitious reduction targets,’ said Pedro Faria, technical director at CDP2.

In others words, change is possible!  As asset managers we have a role to play by financing the companies with an ambitious transition path and engage through dialogue and voting with the companies that are lagging. An example of what can be achieved came in June 2021, when a group of asset managers formed in 2017, called ClimateAction100+, issued a statement with a major oil and gas player. ‘ClimateAction100+, of which Amundi is a member, made a joint statement with them, saying we have debated with and helped to formulate a new strategy for the company, which will see it achieve net zero emissions by 2050 or sooner,’ said Arnaud Faller, Deputy CEO & Chief Investment Officer at Amundi’s subsidiary CPR. ‘This was a huge step: it would have been unthinkable even a couple of years earlier that the CEO of one of the world’s largest oil companies would discuss his strategy and how to align it with a low carbon economy,’ he added2.

Another important strand of Amundi’s engagement with corporate greenhouse gas emitters is via a direct collaboration with CDP. ‘CDP is a very well-known NGO that has been around for decades, and its vitally important work is based on getting companies to report on their emissions so that these can be measured and managed,’ Faller said.

In 2020, CDP pioneered a new dataset giving investors temperature ratings for 4,000 companies around the world, based on targets to cut all the greenhouse gas emissions for which they are responsible. The ratings reflect the global heating likely to occur if global greenhouse gas emissions are reduced at the same speed as the selected company’s emissions, based on its stated target3. Amundi’s innovative collaboration with CDP will see the asset manager using CDP’s temperature ratings to grow its ESG capabilities and measure the temperature of its investment universe. At the same time, Amundi has been pro-active in joining initiatives that bring the power of the asset management world to deal with the crisis4. In July 2021, it joined the Net Zero Asset Managers Initiative, and has launched a 2025 Ambition plan towards net zero in 20505.

In June 2022 the Intergovernmental Panel on Climate Change (IPCC) stated that we have the tools and know-how required to limit warming. But unless there are immediate and deep greenhouse gas emission reductions across all sectors and regions, a 1.5 degree scenario is beyond reach6.

Via its innovative partnerships with organisations such as CDP and the Net Zero Asset Managers Initiative, Amundi continues to demonstrate its commitment to close the gap,  and to be part of the solution.

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1 CDP. July 2017 https://www.cdp.net/en/articles/media/new-report-shows-just-100-companies-are-source-of-over-70-of-emissions
2 CW interview with A Faller, Dec 2021
3 CDP, July 2020 https://www.cdp.net/en/articles/investor/cdp-new-temperature-rating-for-investors
4 https://int.media.amundi.com/news/cdp-pioneers-new-temperature-rating-of-companies-for-investors-3c1f-b6afb.html
5 Amundi, https://www.amundi.com/usinvestors/Investment-Ideas/Responsible-Investing/Amundi-joins-the-Net-Zero-Asset-Managers-initiative
6 IPCC June 22 https://www.ipcc.ch/2022/06/08/opening-remarks-ipcc-chair-ipcc-sbsta-event-wgiii-ar6/


Unless otherwise stated, all information contained in this document is from Amundi Ireland Limited and is as of 03 October 2022. The views expressed in this page should not be relied upon as investment advice, a security or service recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Ireland Limited is authorized and regulated by the Central Bank of Ireland.

Date of first use: 03 October 2022

Doc ID: 2915711