IIGCC launches framework to ‘raise bar for investor climate stewardship’

The Institutional Investors Group on Climate Change (IIGCC) has launched a ‘Net Zero Stewardship Toolkit’, described as aiming to “raise the bar for investor climate stewardship”.

It aims to do so by providing a framework that focusses investors on ensuring they prioritise high-impact corporate engagement and have measures in place to hold laggard companies to account.

The toolkit is designed to support investors that have made net-zero commitments, such as in the context of the IIGCC’s own Paris-Aligned Asset Owner commitment and the Net-Zero Asset Owner Alliance.

The framework sets out key steps, which include setting net-zero alignment criteria, time-bound company-level objectives and portfolio goals. It notes that investors should consider the risk of duplicative effort when establishing prioritisation criteria.

The toolkit report was co-authored by IIGCC and Railpen, the investment manager for the £35bn UK railways pension scheme, and was developed with the IIGCC net-zero stewardship working group, whose co-chairs are provided by EOS Federated Hermes, JP Morgan Asset Management and Railpen.

Chandra Gopinathan, senior investment manager, sustainable ownership at Railpen, said the investor felt the toolkit “could be instrumental in ensuring that the world achieves net zero by 2050”.

Publication of the toolkit comes in advance of 2022 AGMs for most public European and North American companies, with investors in some instances facing key voting decisions. Yesterday, for example, Royal Dutch Shell recommended shareholders vote against a climate resolution filed by campaign group Follow This, saying that, if adopted, it could result in “unrealistic targets that are harmful to the company’s energy transition strategy and against good governance”.

Stephanie Pfeifer, chief executive officer of the IIGCC, said of the IIGCC toolkit and upcoming AGMs: “For those companies putting forward climate transition plans, including ‘Say on Climate’ votes, the message is clear: only put forward credible plans or expect investors to vote against you.”

Separately, AXA Investment Managers today announced a new voting policy, which now also includes a possible vote against management, the board chair and the CEO if companies in sectors exposed to climate issues do not have a net-zero emission strategy with short, medium and long-term reduction targets and executive pay aligned to climate strategy objectives.

Today also sees a group of NGOs write to the co-chairs of the Global Financial Alliance for Net-Zero, Mark Carney and Michael Bloomberg, to challenge them about alliance members’ stance on restricting financing for fossil fuel expansion.

According to research cited by the letter, only five of 74 of the largest members of GFANZ have policies with any mention of restricting some support for companies expanding oil and gas supply.

“Without a major increase in ambition, it is hard to see how the GFANZ alliances and initiatives will halve their financed, facilitated and insured emissions within the next eight years,” the NGOs stated.

Read the digital edition of IPE’s latest magazine