1.5 Degree Transition Challenge - Liontrust Engagement Update 11.21 - Flipbook - Page 7
Next steps and what we want to see
Responding in a timely manner to the climate crisis is important but
we have to bear in mind climate change also has a large social
dimension. Our urgent response to climate change needs to go
hand in hand with the social dimension (referred to as the Just
Transition). We must remember not to solve only for the best climate
change outcome but to ensure we also use this as an opportunity to
reduce inequality, help alleviate fuel poverty and not lose sight of
people. If people do not willingly move with the energy transition,
it will fail.
This engagement for the One and a half degree Transition Challenge
has been about waking companies up to the pace of change required
and challenging them to set ambitious absolute decarbonisation
targets that are front loaded and consistent with the science. What
we need to see from here is these targets being reflected in falling
emissions. To reiterate, these need to decline across the whole
economy by around half every decade, equating to 5–7% every
year and ideally even higher.
Arguably, asking companies to set an ambitious target to
decarbonise is the easy bit. This needs to result in actual
meaningful emission reductions and we will be monitoring
companies’ progress against targets. We believe companies that
will be most successful in an ultra-low carbon economy are those
that are proactive and use this as an opportunity to provide the
economy with what it needs.
We will carry on engaging with the companies we own, and will
report further progress in our 2021 Sustainable Future Annual review.
We called this initiative a challenge for a reason – it will not be
easy to reduce emissions sufficiently within the remaining timeframe
to avert the worst impacts of runaway climate change. But as
proactive investors managing sustainable funds, we want to play
our part by continuing to encourage a more rapid response to
achieve this vital goal.
Liontrust: 1.5 degree Transition Challenge – engagement update - 7
