How can investors engage with companies to drive towards a carbon-neutral future? IIGCC’s Net Zero Stewardship Toolkit provides them with a framework to do just that, and sustainability leads from investment firms across London recently came together to mark its launch and share their experiences.
The event – hosted by J.P. Morgan Asset Management and one of IIGCC’s first in-person events since early 2020 – marked the official launch of the Net Zero Stewardship Toolkit, first released in April 2022. The toolkit aims to help investors prioritise high-impact engagement with companies across their portfolios – an essential step to halving greenhouse gas (GHG) emissions by 2030 and achieving net zero by 2050.
“There is a fiduciary duty”, stressed Patrick Thomson, CEO of J.P. Morgan Asset Management for Europe, the Middle East and Africa, outlining the responsibility of investors to act now on behalf of their clients and reiterating that message that “it’s not as simple as walking away,” or just divesting.
“Stewardship is a core driver of long-term value,” agreed Stephanie Pfeifer, IIGCC CEO, explaining that it is key to “effective and transparent corporate management.”
Shared obstacles, shared objectives
Investor contributors to the toolkit then took to the stage for a series of panel discussions; explaining how they’ve implemented the recommendations themselves and answering questions from the audience.
The Stewardship Toolkit builds on the Net Zero Investment Framework, a methodology familiar with many investors committed to net zero, and presents a six-step approach:
- Prioritization
- Analysis
- Engagement
- Escalation (if necessary)
- Alignment
- Transparency
Sound recommendations, but how do they translate into practice?
For Victoria Barron, Head of Sustainability at British Telecom Pension Scheme (BTPS), stewardship is one of four levers they’re using to reach an ambitious net zero by 2035 target: “It’s an area where we think we can drive really great conversations with our investments,” she told the audience.
Speaking candidly to fellow sustainability experts, Victoria explained that BTPS has now set its own 5-year net zero stewardship strategy based on the toolkit. Doing so has helped them to establish a reporting baseline, and to provide clear and equal guidelines to asset managers.
“IT STARTS AS A HEADS UP TO KEY MANAGERS – READ IT, UNDERSTAND IT, REPORT AGAINST IT AND BE PREPARED TO ANSWER QUESTIONS.”
One common language
The audience also heard from investors representing Federated Hermes, Railpen, Royal London Asset Management and more, as well as UK regulator the Financial Conduct Authority. Though experiences varied, the potential of one set of standards was the same:
“One common language, more powerful when we do it together,” summarised Yo Takatsuki, Global Head of Investment Stewardship at J.P. Morgan Asset Management.
Building on this positive reception, IIGCC is planning further events in other European financial hubs to help more investors understand and test out the toolkit methodology.
If you’d like to know more about the Net Zero Stewardship Toolkit, or how to become an IIGCC member, reach out to us today.