Climate action: what’s next?

Karlijn

We need to focus on the effectiveness of sustainable investing policies to make real economy impact, that is why engagement is such a powerful tool. Using the influence you have as a shareholder and the way you vote can be really powerful to push companies in the right direction, toward a 1.5° pathway.
We look at things like short-term, long-term goals, how is capital expenditure aligned with climate strategies, what do their lobbying activities look like. Is it relaxed or strong board oversight?

Lucy

There is a real emphasis on specific asks and objectives and metrics used in corporate engagement to advance the agenda: moving beyond just commitments and moving more towards the action and the progress on that action.

Isobel

When you talk about what investors need to be doing, we see the leaders setting smart objectives for climate change engagements. That is, objectives that are specific, measurable, actionable, relevant and time-bound.

Karlijn

The final stop in that escalation road map is to consider to divest. But before you'd do that, you'd really try to use all influence that you have to have another conversation, to vote against, to explain why you voted against, and that often opens the conversation again.

Lucy

There are multiple levers in a in a stewardship toolbox and, and divestment is one of those. But often, as the last resort, when all other strategies have been exhausted. Because a seat at the table does continue to give a degree of influence and hopefully more constructive dialogue for change.

Isobel

Increased transparency is generally a good thing. It helps clients and other stakeholders to assess how well an investor is living up to their expectations on climate action. More transparency means more accountability, but increased transparency does also mean more capacity needing go into fulfilling those regulations.

Karlijn

The point of transparency is very important. There will be like more clarity on the type of investments that are there, the types of portfolios that exist, and I think it is important for asset owners to distinguish and to really be aware: what kind of portfolio am I looking at? And does it suit my investment beliefs and mirror the sustainability values that are important to me.

Nalini

What we call a systems approach means working with communities. And we also work closely the investors, our philanthropists. We often engage them in some of the programs and learning. We also then work with the markets, the carbon markets, for instance. There is a future in terms of sustainability, particularly financially, in markets. And an important element of the system is the government. For a government is not a monolithic or a homogeneous entity, obviously. You have various levels of government, from community leaders working with communities, to provincial authorities and local authorities and, ultimately, national government.

Karlijn

Policy engagement is actually quite important. Investors and governments each have their own responsibility to act swiftly and boldly. And we've seen more investors than ever before, implementing net zero goals and strategies into their investment decisions and portfolios.

And in that, investors encourage companies to cut their emissions. We also see investors calling on policymakers to really deliver on robust climate action. And I think investors can actually be a key influence on policymakers. Policy engagement by long-term investors is an important element in the toolkit of capabilities and responsibilities.

Lucy

Having previously sat in a sovereign wealth fund, I understand the power of being on the receiving end of those letters to government related entities. The collective voice, and the articulation of some very clear asks was quite powerful for mobilizing action in a situation where governments may not have been aware of the connection to their debt issuance Programs, and the importance of climate in investors' minds.