University of Oxford develops three principles to guide corporate investment towards climate change goals

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8 January 2018

New principles on corporate investment should address moral challenge of climate change, says University of Oxford

Author: University of Oxford

"New principles to guide corporate investment towards climate goals", 4 Jan 2018

...A new set of principles are needed to address the moral challenge of climate change. These principles, developed by a team of researchers at the Oxford Martin School, and published this week in Nature Climate Change, are a set of scientifically-grounded tools for the use of both investors and companies to assess corporate strategy against climate change...

...The Oxford Martin Principles provide concise and fact-based guidance that can be widely applied to companies...The paper applies these principles to three very different companies - BHP Billiton, Unilever, and Statkraft...

...Professor Sir John Beddington, Senior Adviser at the Oxford Martin School, concludes, "The involvement of the commercial sector is essential if climate change is to be mitigated. The simple solution of no investment in fossil fuel related companies is not the answer. These principles provide a significantly more sophisticated way for investors and companies to engage beyond simple divestment"...

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2 January 2018

Principles to guide investment towards a stable climate

Author: Richard J. Millar, Cameron Hepburn, John Beddington & Myles R. Allen, University of Oxford, on Nature Climate Change

...The highly unequal distributions of both impacts from climate change, and of contributions to observed warming, make climate change a moral issue...A modern climate-specific set of principles is needed to provide investors with a minimal set of clear, fact-based guidance for climate-conscious investment that can be implemented by investors across the economy...

...[W]e propose three simple principles to help guide investors...Principle 1: All industries must eventually reach net-zero emissions, even if some industries do so before others. Companies should commit to a date (or a temperature increase, such as 1.5 °C or ‘well below 2 °C’) before which the net CO2 emissions associated with their activities (including both supply chains and products sold) will be zero….Principle 2: Company executives should have business plans that ensure the profitability of their business, and limit supply chain risks, once emissions reach net zero…Principle 3: Mid-term targets (for example, for 2030) that are directly relevant to achieving a net-zero business model, such as the rate and long-term trajectory of reductions in CO2 emissions, are vital to properly assess compatibility with the Paris Agreement…

…To illustrate the operation of the principles in practice…we apply them to three large listed companies: BHP Billiton (mining), Unilever (consumer goods), and Statkraft (utility). These case studies demonstrate that compliance with the principles is possible…

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