BOSTON / CHICAGO Nov 16 (Reuters) - Ambitions to wind down the world"s coal use are likely to be accelerated by corporate net-zero pledges and better ways of measuring where factories in the global supply chain get their power, investors said. The use of coal-fired electricity, especially in Asia, remains a major issue for top western manufacturers and retailers, putting them under pressure to shift to cleaner sources of supply in line with a deal at U.N. climate talks over the weekend targeting fossil fuel use.Sophie Dejonckheere, Director of Sustainable Finance at TD Securities, who attended the U.N."s conference in Glasgow, Scotland, said within a year or two investors will have access to enough details to press companies about what type of power was used in the production of their goods, both from regulatory disclosures and public sources like satellite imagery. A growing number of pledges by corporates to cut their emissions will also give investors leverage to see that executives follow through, said Dejonckheere and several other investors. They pointed to announcements at the U.N. summit, like an effort by banks and financial companies with over $130 trillion of capital to invest toward net-zero goals. Companies including Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O) also pledged to use their purchasing and supply chains to develop clean energy. "All of a sudden the coal-fired power plants supplying the energy for these products might get some engagement," Dejonckheere said. Elizabeth Levy, portfolio manager at Trillium Asset Management, said she expects more companies will start buying power from renewable sources in developing nations. "Companies that were talking about their net-zero commitments need to be thinking about ways to fulfill them," Levy said. Coal accounted for 36.7% of the world"s power mix in 2019, according to watchdog, the International Energy Agency, and about 64% of the total energy supply in China. read more RENEWABLE PUSH Electricity generation has been on the radar of sustainability-minded investors for years, especially in the case of big retailers like Walmart Inc (WMT.N) and Target Corp (TGT.N), which draw heavily on Asian suppliers. James Katz, CEO of sustainable investor Humankind Investments, said Walmart is underweighted in his firm"s Humankind U.S. Stock ETF (HKND.P), partly due to the energy sources in its supply chain. That could change if manufacturers for the world"s biggest retailer switched to more sustainable electricity, he said. The U.N. focus on reducing coal use "should translate into more demand from investors for these sorts of changes," Katz said. Walmart declined to comment, citing a quiet period before earnings. Last year Walmart began a renewable energy program with France"s Schneider Electric SE (SCHN.PA) to give U.S.-based suppliers more access to solar and wind power. "A lot of organizations that we work with don"t necessarily know how to get into buying renewable energy," said Zach Freeze, Walmart"s senior director of sustainability, in a recent interview. A Target representative declined to comment. "HAPPENING FASTER" Some investors said they were skeptical investor pressure would lead to fast changes, especially in developing markets with less public disclosure, or for fossil fuel assets owned by hedge funds or government entities. "Things not sourced out of the U.S. or Europe will be harder to track," said John Bartlett, co-portfolio manager of the Reaves Utility Income Fund (UTG.A). Still his fund"s top U.S. holdings include companies that are moving away from coal like Nextera Energy Inc. (NEE.N), whose Florida Power & Light unit shut down its last coal plant at the end of 2020. Lisa Edwards, president of ESG and compliance software consulting firm Diligent, said the U.N. conference"s embrace of global standards for climate reporting should also make it easier to evaluate global supply chains. read more Client demand for information on supply issues is soaring, she said, citing the example of an electronics parts supplier looking to evaluate the carbon footprint of every one of its products made in Asia. "The change is happening faster than any other reporting I can remember," Edwards said.
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