Co-written with Faith Ward, Chair of the IIGCC Board and Chief Responsible Investment Officer at Brunel Pension Partnership.
2024 saw almost half of the world go to the polls in ‘the year of elections’, with the policy implications set to be felt for years to come. Whatever these implications are, one certainty is that the energy transition is happening – in fact, it is accelerating in many cases in line with the economic rationale.
Against this backdrop our mission remains unchanged: to bring the investment community together in making significant progress towards a net zero and climate resilient future by 2030.
At IIGCC, we don’t comment on politics: it’s policies that count. Despite the ups and downs of electoral cycles and geopolitical events, the economic shift is well underway. It’s in this context that we refined our strategy in 2024 to better reflect the needs of our growing membership base, looking ahead to the challenges on their horizon. Offering the latest thinking for our members, informed by investors, remains core to what we do.
Demand for our services increased in 2024. As a leading European organisation our membership expanded, welcoming a range of asset owners, asset managers and industry associates. We work with members to support them in solving the challenges they face when addressing climate change in their individual contexts.
This is centred around providing innovative platforms, frameworks and guidance to help members manage climate risks and opportunities within investment strategies; undertake effective stewardship of assets; shape a supportive policy and regulatory environment; and influence wider stakeholders to contribute to a net zero and climate resilient financial system.
In 2024 we built on this commitment by outlining four clear, strategic priorities to help investors face current and future challenges. These form the structure of this report.
- Net zero
- Nature
- Adaptation and resilience
- Emerging markets and developing economies
Towards a net zero and climate resilient future
Net zero remains a core focus and our work expanded across 2024. This included the second iteration of the Net Zero Investment Framework, NZIF 2.0, which was launched at a packed event at London Climate Action Week. More than 200 investors and associates joined us for the launch, which included a keynote speech from Dr Fatih Birol, Executive Director of the International Energy Agency.
Through our membership, investors can now participate in five engagement initiatives, which together consider more than 270 companies whose transition is essential to net zero.
Work on physical climate risk as part of the adaptation and resilience workstream gathered pace, and we lead on phase two of the Physical Climate Risk Methodology (PCRAM). Its first set of case studies and a discussion paper were released in 2024, outlining how PCRAM has the potential to assist investors in moving beyond a sole risk management lens on physical climate risk to a value creation exercise.
Alongside this, the climate-nature nexus – and the associated financial risks and opportunities for corporates and investors – received heightened investor focus. Food, agriculture and land use account for 30% of global emissions, while deforestation represents a material impact on our ability to tackle climate change. It is in this context that we announced our new role as the Secretariat of the Financial Sector Deforestation Action initiative.
The first set of Nature Action 100 Company Benchmark results, released at Biodiversity COP16 in Cali, furthered thinking in this space. The benchmark will help investors to better understand the material nature-related financial risks and opportunities in their portfolios to protect the long-term economic interests of their clients and beneficiaries. IIGCC helped to launch and now co-convenes Nature Action 100.
A global view
Discussions with members, together with the latest research, have made clear that if we ignore the developing world we cannot solve climate change. We reflected this in our strategic priority focus on emerging markets and developing economies in 2024, including new working groups and policy engagements at the UK, EU and global level.
The science that underpins investor commitments and action on climate remains unchanged, with a clear economic shift underway as corporates, industries and economies adapt to, drive and profit from the transition.
This included an open letter to negotiators of the New Quantified Collective Goal on climate finance ahead of COP29, calling for direct recognition of the private sector. We made clear that doing so can improve the ambition of developed and developing economies’ Nationally Determined Contributions, which are due in 2025.
While we wait for the policy outcomes from this bumper election year, what is clear, in our view, is that there has never been a greater need for IIGCC, our work and our people. The science that underpins investor commitments and action on climate remains unchanged, with a clear economic shift underway as corporates, industries and economies adapt to, drive and profit from the transition.
It is this growing body of evidence that informs our membership, charged as they are with a distinctly long-term view on behalf of their clients and beneficiaries. New research such as the International Energy Agency’s Renewables 2024 report amplifies this shift, pointing to “a beautiful story” as renewable capacity soars. It is one of many examples.
Within this context, IIGCC has a hugely valuable role to play – particularly across Europe. We have supported investors on climate for almost two decades, and we will continue to help them navigate the risks and opportunities of the transition. Be that in net zero, nature, adaptation and resilience or investing in emerging markets and developing economies.
This is made possible by our fantastic membership. Thank you for your support, your time and your unwavering commitment, and for the inputs which help to inform our work. We hope that this report underscores the incredible role you play in creating the change the world needs on climate in lockstep with your financial objectives and responsibilities.
As we see out the year, we remain committed to serving you and helping you to tackle the challenges and to seize the opportunities ahead, in 2025 and beyond.
Read 'Creating change: IIGCC annual report 2024'. If you would like to know more about becoming a member of IIGCC, why not get in touch today?