Insight

IIGCC in 2022 – keeping up momentum on climate progress in a challenging year

30.11.22

“If last year was a landmark one for net zero commitments, this year was the one where the real work of implementation began.” Stephanie Pfeifer, IIGCC CEO and Faith Ward, IIGCC Chair and Chief Responsible Investment Officer at Brunel Pension Partnership.

As highlighted by the foreword of IIGCC’s 2022 Annual Report, the shifting focus towards climate resilience and adaptation along with mitigation efforts is arguably the key trend that has emerged on the global climate stage in 2022. This was demonstrated by its prevalence throughout COP27.

Addressing climate resilience and adaption has also been a key focus for IIGCC this year. Our latest Annual Report covers key milestones and progress from each of our programmes. We’ve worked closely with members this year to develop and expand tools and guidance to support investors in incorporating climate considerations into their portfolios, engaging with companies and advocating for a supportive policy environment.

We also reflect on IIGCC’s growth. We’ve come a long way in 20 years, from fewer than 10 members and 1 staff member to a team of 40 with 400 members representing almost $60 trillion in AUM in 2022.

Watch our short animation here and read our highlights below for a high level summary of our key milestones. The full 2022 Annual Report can be downloaded here.

Looking back on progress in 2022

Guiding: Investor Practices. Our team worked with members and the broader investment sector to better integrate climate risks and opportunities into their investment processes and decision making, exploring how to align portfolios with the goals of the Paris Agreement.

Key highlights include:

  • Developing net zero methodology via the Net Zero Investment Framework (NZIF), the most widely used framework for investors, including adding guidance for three new asset classes and publishing a discussion paper on climate resilience investment framework.
  • Momentum continues for the Paris Aligned Asset Owners and Net Zero Asset Managers initiative. 2022 saw hundreds of asset managers and asset owners disclose their initial net zero targets, as well as developing transition plans to support in achieving them.
  • Helping investors gather data for net zero by launching a catalogue to help investors implementing net zero strategies to find and assess the most relevant data sources for their needs.
  • Developed The Climate Investment Roadmap to support investors in understanding the $126 trillion of investment in climate solutions required to meet the goals of the Paris Agreement.
  • Investors continue to collaborate on key net zero topics through IIGCC’s Net Zero Surgeries. These have proven popular with members, providing a valuable opportunity for practitioners to learn from each other and discuss live challenges and innovations relating to the implementation of net zero commitments.

Engaging: Corporate Programme. The team has supported members in undertaking effective stewardship and active ownership of their investments with a focus on listed equity and corporate bonds, including as a founding and active network partner of the Climate Action 100+ initiative.

Key highlights include:

  • Good progress in Europe with Climate Action 100+ focus companies, even in the context of the energy crisis. The latest Climate Action 100+ Net Zero Company Benchmark results showed that engagements supported by IIGCC accounted for 48% of all global improvements between March and October 2022.
  • A key milestone was reached in July 2022 with the launch of an investor-led framework of pilot indicators to assess banks on the transition to net zero, in collaboration with TPI, which assessed banks across 6 key areas, including targets and decarbonisation strategies.
  • Launch of the Net Zero Stewardship Toolkit, providing investors with foundations to enhance their stewardship practices and deliver net zero-aligned real-world decarbonisation.

Influencing: Policy Programme. Helping to shape sustainable finance and climate policy, as well as regulation for key sectors of the economy at national, EU, and global levels. The team advocates for the implementation of policy frameworks that create an enabling environment for investors to decarbonise their portfolios and scale investment in climate solutions.

Key highlights include:

  • Standing up at COP27 to showcase investor action and progress on topics such as net zero target-setting and implementation, company engagement, disclosure, and policy advocacy whilst taking a proactive role when speaking with governments and international organisations to advocate for an enabling policy environment.
  • Leading and contributing to global initiatives, through chairing the Investor Agenda’s Policy Working Group and leading development of the 2022 Global Investor Statement to Governments on the Climate Crisis.
  • Tackling the trilemma by advocating strongly for policies that uphold ambition on net zero while delivering energy security, independence, and affordability.
  • Accelerating transition finance and the transformation of the real economy by engaging across a range of files to promote coherent, interoperable regulatory frameworks that support the reorientation of capital towards net zero.

What’s next?

“It is fair to say that the word ‘unprecedented’ may have been diluted by soundbites in recent years, but for investors it has never been more accurate. The unique requirement of investors’ fiduciary responsibilities to their clients and beneficiaries necessitates a long-term view and international outlook, but it also creates a unique perspective on the climate crisis that has enormous value.” Stephanie Pfeifer and Faith Ward.

While there has been excellent progress across all programmes and initiatives over the last year, we are even more ambitious for the year ahead. We enter 2023 facing significant global headwinds and challenges. But this cannot distract or delay our goals. Our key priorities for next year will be to:

  • Support continued progress towards an energy transition that addresses the challenges posed by the trilemma
  • Scale up our nature and biodiversity expertise to support our members
  • Consider how private finance can be effectively mobilised to support developing economies and ensure that it is done in a way that reflects the need for a just transition

If you are interested in learning more, our full annual report can be downloaded here.