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IIGCC Constitution

Background

The Institutional Investors Group on Climate Change (IIGCC) was established in 2001 as an opportunity for collaboration between asset owners and asset managers to address the investment risks and opportunities associated with climate change.

In 2005, IIGCC merged its operations with The Climate Group (TCG) to become a semi-autonomous programme within TCG, retaining its identity through the Steering Committee but with day-to-day management carried out by TCG under a Memorandum of Understanding. IIGCC has appointed a programme director in association with TCG to strengthen operational capability.

Strategic Aim

To identify, promote and demonstrate competence throughout the investment process in assessing and actively managing the risks and opportunities relating to climate change and the transition to a secure climate system.

Strategic Objectives

• To equip members with the knowledge and tools to assess, engage and actively manage the investment implications of climate change on the assets they own in order to preserve and enhance their value.
  
• To act as champions for the integration of climate risk and opportunities into the everyday functioning of the investment community.
  
• To advocate public policy and market solutions that ensure an orderly and efficient transition to a secure climate system which is consistent with long-term investment objectives.
  

Organisation Profile and Values

As active and responsible institutional investors protecting asset values, members combine expertise in financial market knowledge and climate risk; represent a diversity of asset owners and investment professionals with a broad range of expertise covering different asset classes, sectors and investment styles; and consider the long term investment horizon.

Members share certain values with regard to working in this alliance, namely that:

• anthropogenic emissions of carbon dioxide and other greenhouse gases are contributing to climate change;
  
• engaging on public policy related to climate change is beneficial to investors;
  
• effective and responsible management of climate risk is an indicator of good corporate governance; and that
  
• collaboration can be an efficient approach to addressing the current systemic failure to recognise climate risk and opportunity by enabling members to share knowledge, understanding and experience; to coordinate activities and messages where appropriate; and to minimise duplication and maximise resources and efficiency.
  

Membership

Membership is open to any institutional investor (from Europe or elsewhere) and those directly related to the trustee investment decision making process that supports the IIGCC’s strategic aims and objectives, and aligns with the organisational profile and values.

Membership is subject to the payment of an annual fee agreed by a general meeting of members and may be drawn from various investor related groups, including but not limited to:

Group A

• Investment managers
•Property fund managers

Group B

• Pension funds
• Charitable foundations

Group C

• Group B institutions with assets less than £500 million that belong to an association or umbrella body ('Sponsoring Organisation')

 

Applications for membership should be made in writing and signed by a director or equivalent of the pension fund or company. New members will be accepted by a simple majority of Steering Committee members.

Role of members

Members or their representatives are expected to:

• contribute to projects by signing on to project groups, by providing resources to support their work, or by providing governance oversight through observation or comment;
  
• promote and support the work of IIGCC in the context of the aims and objectives; and
  
• attend at least one formal meeting of the full group each year;

A member who fails to abide by this constitution or is deemed to be acting contrary to the interests of IIGCC, or its association with TCG, may have their membership terminated by a super majority (over 75%) of Steering Committee members.

Chairman and Vice-Chairman

The role of the Chairman and Vice-Chairman is to represent the IIGCC as and when required, to chair meetings of the Steering Committee and general meetings, and to oversee the governance of the IIGCC. Appointments shall be agreed annually at a general meeting of all IIGCC members and they may be re-appointed a maximum of two times. The Vice-Chairman will deputise for the Chairman when unavailable.

Steering Committee

A Steering Committee drawn from the membership is responsible for:

• reviewing progress of implementation of the programme;
  
• defining and overseeing IIGCC’s strategic direction;
  
• developing and reviewing progress of an annual work-plan for implementation by the Programme Director;
  
• formulating and approving policy positions and responses;
  
• determining the strategic allocation of resources to projects;
  
• managing the communications relating to IIGCC as a whole; and
  
• ensuring the administration and other IIGCC's activities are conducted properly and with due care.

The Steering Committee will meet at least quarterly and consist of nine members; eight IIGCC members, at least three from Group A and three from Group B and a representative from TCG. In addition, the Steering Committee may co-opt up to two additional members to reflect the aims and objectives of the IIGCC. The Steering Committee shall nominate one of their members to serve on the advisory board of TCG. The Programme Director will also attend Steering Committee meetings and act as Secretariat to the Steering Committee.

Consensual decision-making will be the norm at meetings of the Steering Committee, but when necessary each member will have one vote (with the chair of the meeting having an additional vote if necessary).

For the purposes of meetings, the quorum shall consist of at least 50% of members in attendance (in person or electronically), including either the Chairman or Vice-Chairman. If at two successive meetings of the Steering Committee, members are unable to make a valid decision due to the lack of a quorum, a further meeting may be called by giving two weeks notice, in writing or electronically, and at this meeting those present shall be deemed to constitute a quorum.

The appointment of IIGCC members, other than the Chairman and Vice-Chairman, shall be agreed at a general meeting of all IIGCC members for a period of up to three years on a rotational basis such that at least one member is subject to re-election each year, and they may only be re-appointed once.

Any member of IIGCC may put themselves forward for appointment as Chairman or Vice-Chairman, or to the Steering Committee by notifying their willingness to stand to all members at least one month in advance of the meeting. If there are more nominations than positions vacant, confidential voting will take place where each IIGCC member has one vote. The candidate with the most votes will be appointed.

General meetings of members

General meetings are open to all members and are held at least twice annually, one of which shall be to consider the annual report and accounts of the IIGCC. General meetings are called by the Chairman, and chaired by the Chairman or Vice-Chairman of the IIGCC. In addition, an extraordinary general meeting can be called by the Chairman if notified by 1/3 of the members (notification of Chairman by writing and/or email).

For the purposes of general meetings, the quorum shall consist of at least 50% of members in attendance, either in person or by electronic means. If at a general meeting, members are unable to make a valid decision due to the lack of a quorum, a further meeting may be called by giving two weeks notice, in writing or electronically, and at this meeting those present shall be deemed to constitute a quorum.

Finance and accounting

The Steering Committee will:

• nominate one of its members to act as Treasurer to oversee the financial and accounting matters of the IIGCC; and
  
• appoint an auditor to conduct an annual audit of the accounts.

A bank account and accounting services are provided by TCG under the Memorandum of Understanding agreed between the two parties.

The Steering Committee will agree each year a budget of its estimated income and expenditure. Any decision to commit expenditure must be formally authorised by the Programme Director and one IIGCC member of the Steering Committee, or by two IIGCC members, as being within the agreed budget and must be notified to the Treasurer and to TCG.

Reports on the financial position will be submitted to the Steering Committee by TCG for consideration as required and at least annually.

Communication

Communication with the external world will be undertaken with sensitivity to the full spectrum of IIGCC members and in accordance with a strategy agreed by the Steering Committee, and will be subject to approval by the Chairman or another member of the Steering Committee.

Representation of IIGCC to external parties will be coordinated by the Programme Director, who will serve as the point person for all external communications relating to the IIGCC. The PD will ensure that this representation and all external communications are consistent with the IIGCC vision/mission, ongoing and approved activities, and policy statements previously agreed with TCG for public dissemination.

Where a previous policy line has not been agreed, including requests for comment by media, by-lined articles and presentation, prior approval by at least one member of the Steering Committee must be obtained.

Members should not comment in public on the detail of an individual ongoing project unless and until the output is published, nor should they comment in public on any matter relating to the operation of the IIGCC or TCG without the prior approval of a member of the Steering Committee.

Amending the Constitution

This Constitution may only be amended by a super majority (over 75%) of members attending a general meeting at which there is an appropriate quorum.

Revised version agreed at the general meeting of the Group on 24 May 2007.