Expecting a company to reduce its customers’ emissions might seem far-fetched. But with sustainability top of mind for many investors, the downstream impact of their investments is increasingly a focus of concern – and of shareholder proposals requesting additional disclosure, and action.
These emissions, which fall into a category known as “Scope 3”, are often far more expansive in total compared with a company’s operational emissions. For investors focused on ensuring that their holdings are aligned with the goals set out by the Paris Agreement, managing Scope 3 emissions can provide a significant lever with which they are able to reduce the climate impact of their portfolios, and thus mitigate risks to their investments.
With several shareholder proposals on the topic gaining majority shareholder support in 2020, and more on the way in 2021, it’s an area where all market participants need to be fully informed.
Glass Lewis’ Scope 3 Emissions — An Investor Primer provides key background and insights on why Scope 3 emissions are relevant to investors, what some of the key critiques are regarding companies’ existing Scope 3 emissions reduction targets, how this topic is being addressed by both the research and investment communities, and what recent shareholder proposals are revealing about the latest trends in this area.
Scope 3 Emissions — An Investor Primer is available now. Glass Lewis customers can access the report on Viewpoint via the Help & Resources menu, or Governance Hub, or contact their Glass Lewis Representative for more information.
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