GIC joins global investors to push large Asian utilities to cut emissions

GIC has joined a dozen other institutional investors and stewardship service providers to push big Asian utilities firms to cut emissions.

The group of investors, collectively responsible for US$8.8 trillion in assets under management or advice, are zooming in on five utilities companies in the first year of the programme: China Resources Power Holdings, Hong Kong's CLP Holdings, Japan's Chubu Electric Power Co and Electric Power Development Co, as well as Malaysia's Tenaga Nasional Berhad.

These companies are in "focus" 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, said a statement from the coordinating body, the Asia Investor Group on Climate Change (AIGCC).

The five focus utilities collectively emitted about 285 million tonnes of carbon dioxide in 2019 - equivalent to the national emissions of a country such as Spain, the AIGCC noted.

Asian utilities are responsible for 23 per cent of the world's total carbon emissions, it said. The average age of Asia's coal-fired power plants, which have an average life of 40 years, is only 13 years.

In engaging the region's "systemically important" electric utilities, the programme is looking for these firms to cut emissions, strengthen disclosure and improve governance of climate-related risks.

The other investors in the programme include Fidelity International, JPMorgan Asset Management and Sumitomo Mitsui Trust Asset Management.

In a statement, chief investment officer for fixed income and chair of the sustainability committee in GIC, Liew Tzu Mi, said: "As a long-term investor, GIC believes in supporting companies in their transition towards greater sustainability. Helping these companies reduce their emissions while strengthening their disclosure and governance standards will not only advance the sustainability agenda, but ultimately protect and enhance their long-term value."

The programme will complement and run in parallel with the global Climate Action 100+ initiative.