As the focus of investor climate action shifts from ambition to implementation, collaboration is becoming increasingly important in addressing systemic risks and delivering long-term value. In this Member Insight, Rasmus Bessing, CO-CIO, Responsible Investments & Products at PFA, reflects on the role of stewardship, the growing importance of policy engagement, and why investors must focus on measurable, real-world outcomes.
Climate change is both a material financial risk and a source of long-term investment opportunity. As a universal owner, our returns depend on the resilience of the broader economy, so understanding and addressing climate-related financial risks and opportunities is central to our fiduciary responsibility to create long-term value for our customers.
For us, this means ensuring our overarching climate objectives are reflected in how we invest and engage. IIGCC has helped us translate those objectives into practical stewardship activities, through investor initiatives, guidance, research and policy engagement.
Strengthening our stewardship approach
Investor initiatives such as Climate Action 100+ and Nature Action 100 have been particularly valuable in supporting structured engagement with companies on climate and nature-related financial risks.
Climate Action 100+ stands out as a powerful example – helping us to establish effective climate stewardship as a core part of long-term investment and risk management. Its benchmark reports give us a valuable evidence base for understanding company progress and informing our engagement.
IIGCC’s wider stewardship research, including company memos ahead of AGMs, also provides useful input into our engagement activities and proxy voting decisions.
At the same time, our understanding of effective stewardship continues to evolve. Addressing systemic risks such as climate change requires us to look beyond individual companies to the wider policy, regulatory and economic environment in which they operate.
This is why IIGCC’s growing focus on systems stewardship and policy engagement has been valuable to us. Its combination of technical expertise and coordinated investor outreach gives us a stronger platform for engaging policymakers on climate-related developments and supporting the policy and regulatory conditions needed for the transition to progress.
Collaboration in a more complex environment
This collective approach feels particularly important today. Investors are navigating a more complex and uncertain geopolitical environment, while climate change remains a systemic challenge that extends across companies, sectors and markets.
IIGCC gives us a forum to work through these challenges with peers, drawing on different perspectives and expertise while strengthening the investor voice in conversations with companies and policymakers. That collective approach helps us respond to systemic challenges in ways that would be difficult to achieve as an individual institution.
Looking ahead
Over the next ten years, we expect the role of institutional investors to continue evolving. Stewardship will increasingly be judged by its ability to support real-world progress and long-term value creation, with greater emphasis on measurable outcomes rather than commitments alone.
Investor initiatives will remain essential, particularly in helping investors navigate the complexities of the transition and address challenges that require collective action. For us, the priority is to maintain ambition while strengthening the effectiveness of our stewardship and keeping our customers’ long-term interests at the centre.
This is part of our 25 years of IIGCC Member Insight series. To find out more about IIGCC’s 25th anniversary click here.