With the construction materials sector exposed to significant transition and physical risk resulting from climate change, the Institutional Investors Group on Climate Change (IIGCC) recent paper, Investor Expectations of Companies in the Construction Materials Sector, outlines the steps that investors expect companies to take to manage climate risks and accelerate action to decarbonise in line with the goals of the Paris Agreement.
The guide is endorsed by other investor networks that make up the Global Investor Coalition of Climate Change, and was developed in line with the goals of Climate Action 100+ in order to inform investor engagement with construction material firms on the initiative’s global list of 161 focus companies.
Investors supporting the Climate Action 100+ initiative expect construction material companies to make commitments in respect of
- Implement a strong governance framework which clearly articulates the board’s accountability and oversight of climate change risk and opportunities.
- Take action to reduce greenhouse gas emissions across their value chain, consistent with the Paris Agreement’s goal of limiting the increase in global average temperatures to well below 2°C above pre-industrial levels, and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
- Provide enhanced corporate disclosure in line with the final recommendations of the TCFD5 and, when applicable, sector-specific Global Investor Coalition on Climate Change Investor Expectations on Climate Change to enable investors to assess the robustness of companies’ business plans against a range of climate scenarios, including well below 2°C and improve investment decision-making.
Climate change risk is especially acute for companies that manufacture cement. As the most widely used construction material globally, cement is the source of 7 percent of global man-made carbon dioxide emissions. If the cement industry were a country, it would be the third largest global emitter, behind only China and the US.
Declare is a construction materials transparency disclosure programme.
The Living Product Challenge is a climate responsible framework certification programme for manufacturers to create products that are healthy, inspirational and regenerative, giving back to the environment and people. https://living-future.org/lpc/
The Institutional Investors Group on Climate Change (IIGCC), is the European forum for investor collaboration on climate actionand the voice of investors taking action for a prosperous, low carbon, future.