The Transition Pathway Initiative (TPI) report assessed 274 of the world’s highest-emitting publicly listed companies finding that 46% of them are not aligned to meeting the Paris Accord. Only 20 of those firms are on course to beat the 2 degree target, but who can put the pressure on them to change with the times?
It is very difficult in these times of market uncertainty, trade wars and Brexit fatigue to find yield, let alone maintain member satisfaction. It is understandable that looking at individual stock allocation may be at the bottom of the to-do list when considering which funds and investments to make during the due diligence process. It has, however, never been more important to do just that.
Major corporations will operate within the rules that nations set, but internationally, they might look for the cost-efficient solution over green to satisfy shareholders.
Utilising the power of capital, pension funds can have incredible sway over organisations if they use their influence to ask for more than just returns. Whether that is in exerting pressure directly on companies your fund invests in or on the asset managers and investment firms who look after parts of your portfolio, it is within the power of the trustee to make a real impact.
That is why we have been hugely excited by the trustees who helped forge the mallowstreet Climate Charter and those who have signed in their own personal capacity. The Climate Charter calls for trustees:
- To ask, ’What is the impact on the climate?’ for each and every investment that is proposed;
- to demand that the carbon impact of every investment is measured and reported on by asset managers and work actively and collaboratively to develop complete carbon measurement standards;
- to insist that each investment manager actively engages with corporate boards underlying the investments, so that every company develops and discloses both a complete measure of their carbon impact and a clear business plan to transition to a low carbon future; and
- to review, and ultimately recommend the termination of, any investment manager that fails to support and actively engage in stewarding the transition to a low carbon future.
A big thank you to those who have signed already and for the support you have shown the Charter so far.
JP Morgan Cazenove 1987 Pension Scheme Member-nominated Trustee Director
Santander UK Group Pension Scheme; Coal Pension Trustees Pension Scheme; Railways Pension Scheme
Chairman of Trustees; Trustee
Centrica plc Centrica Pension Scheme
Chairman of Trustees
National Grid plc National Grid UK Pension Scheme DB
Chairman of Trustees
Lloyds Bank Pension Schemes No 1 & No 2; HBOS Final Salary Scheme
Stanhope Pension Fund
AVIVA Staff Pension Scheme; Mineworkers' Pension Scheme
LGPS - Hampshire County Council Pension Fund
FundDe La Rue plc Pension Scheme
The Telent Pension Office G.E.C. 1972 Plan
Citi UK Pension Scheme; Clifford Chance Pension Scheme
Cincinnati Machine Pension Plan
FPPS (Friends' Provident now owned by Aviva)
Chair, Trustee Board and Member of Investment Committee
Independent Consultant and Trustee
Northern Trust Pension Plan
Independent Consultant and Professional Trustee
University of East Anglia Staff Superannuation Scheme
Agility Pension Plan
Railways Pension Scheme Nestlé UK Pension Fund
Chief Executive - RPMI Independent Trustee - Nestlé UK Pension Fund
Pension Board Chair
St. James's Place Wealth Management
Local Pension Partnership
Richview Residence Reserve Fund
Independent trustee/chair of trustees
National Grid UK Pension Scheme
Trustee, Chair of Governance Committee
Formerly IBM JOHN LEWIS BBC AND BA
TRUSTEE AND INVESTMENT COMMITTEE
Lloyds Bank Pension Schemes 1 & 2, HBOS, Local Pensions Partnership
Investment Committee Member ESG Investment Advisor
Advising four LGPS funds
Independent investment adviser
Independent Professional Trustee at 20-20 Trustees.