There is little appetite for forceful engagement with high-carbon companies among large bondholders, despite widespread awareness of the risks of rising temperatures, new research finds.

ShareAction’s new report, titled “Sleeping Giants – Are bond investors ready to act on climate change?” is based on 22 in-depth interviews with asset managers, asset owners and other corporate bond market professionals to explore their attitudes to engaging with issuers about climate change.

The report finds that environmental, social, and governance (ESG) risks are well understood by bond investors and consideration of ESG factors is generally already part of their investment processes. However, bond investors balk at the suggestion they might use their ability to refuse to refinance company debt to press for stronger climate action.

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