Investors engaging with Hong Kong power utility CLP Group on climate change through the Asian Utilities Engagement Programme have welcomed the company’s announcement that it will commit to phasing out its coal power fleet by 2040 and achieving net-zero emissions by 2050.

The Asian Utilities Engagement Programme was launched in June by 13 institutional investors and stewardship service providers, supported by coordination from the Asia Investor Group on Climate Change (AIGCC).

CLP is one of five companies that investors are engaging with directly on climate change risks and opportunities through the programme.

Investors have adopted a common agenda to guide this engagement, which seeks from companies, among other things: clear decarbonisation strategies with short-, medium-, and long-term action plans, including a timetable to phase out coal-based emissions in line with 1.5 degrees Celsius temperature scenarios; enhanced disclosure on climate risks; and a strong governance framework for the management of climate risks.

The engagement with CLP is led by BNP Paribas Asset Management and Manulife Investment Management as lead investors, and is backed by a number of supporting investors.

“The commitment by CLP to phase out its coal fleet by 2040 and target net-zero emissions by 2050 is a critical market signal for Asia as the region progresses in its energy transition towards a low carbon economy,” says Paul Milon, head of stewardship, Asia-Pacific, BNP Paribas Asset Management.”

“Asian electric utilities are crucial to meeting the goals of the Paris agreement as the sector is responsible for almost a quarter of the world’s total carbon emissions,” adds Rebecca Mikula-Wright AIGCC chief executive officer. “CLP has taken strong steps that should serve as a good example for similar Asian companies to address their climate risk, transition to net-zero emissions and remain competitive in international capital markets.”