The right approach
The right demands
The right sanctions

Financial institutions must immediately exclude, from all financial services, companies that are unable or unwilling to transform their activities to align them with a 1.5°C trajectory.

Other companies engaged in activities currently incompatible with the Paris Agreement objectives can still make the necessary transformations to align themselves with a 1.5°C trajectory. Financial institutions must engage with them in order to make it happen.

Reclaim Finance calls on investors to join collective engagement initiatives such as Climate Action 100+. However, their participation must be proactive and must complement, not replace, their own engagement strategies.

Reclaim Finance therefore calls on all financial institutions to adopt the following measures.

The right approach

  • Increase staff in charge of engaging with companies.
  • Publish and publicize demands to all companies that are clients or listed in their investment, financing and insurance portfolios (hereafter referred to as companies).
  • Integrate the objectives of the engagement into the overall customer relationship and make the renewal of services dependent on the achievement of these objectives.

  • Ensure that external asset managers follow up on these demands.

  • Approach and convince other financial institutions to join in the commitment efforts and adopt measures for the immediate exclusion of companies that are not aligned with or do not wish to align with the 1.5°C objective.

The right demands

In particular, Reclaim Finance calls on financial institutions to ask companies for:

  • A commitment to align their activities with the 1.5°C target, and for fossil fuel companies to move out of oil and gas by 2040 in EU/OECD countries and by 2050 in other countries, and for the coal sector to move out 10 years earlier.
  • A commitment to integrate the rights of workers and local communities during business transformation and train them for sustainable jobs in the future.

  • The integration of climate criteria at the company’s highest level, in particular by making the appointment and remuneration of board members dependent on the achievement of specific climate objectives.

  • A public commitment not to conduct or support anti-climate lobbying practices. This implies being transparent about lobbying expenditures. It also requires leaving professional associations that promote practices contradictory to the 1.5°C target or oppose public climate measures.

  • A commitment to review their development (CapEx) and operational (OpEx) expenditures to align them with the 1.5°C target.
  • A commitment to 1/ use scenarios with a high probability of success, immediate emission reduction efforts, and low use of negative-emission technologies; 2/ always follow the best available scenarios, methodologies and tools, and support efforts to develop them.
  • Reporting must be aligned with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations. This includes targets, investment plans and decarbonisation objectives, as well as the governance structure dedicated to integrating the achievement of climate objectives into corporate management.

The right sanctions

Reclaim Finance asks financial institutions to sanction:

  • Companies that initiate or threaten to initiate legal action, for example through the investor-state dispute settlement mechanism, to counter climate regulations.
  • Companies that sell instead of closing their carbon assets, as this does not lead to real reductions in greenhouse gas emissions.
  • Companies that do not meet the demands. Before engaging, financial institutions must have adopted and communicated a strategy of intensification which is to be deployed in case the engagement fails or brings insufficient results.This strategy must include intermediary deadlines over time (6, 12, 16, 24 months) and use all the tools available to financial institutions. This includes open letters, forums and public statements; filing and voting on resolutions and sanctions against management at the General Meeting; suspending financial services and tightening the terms of financing and finally excluding companies from all financial services.