On the go: Railpen, which manages around £35bn in assets for the Railways Pension Scheme, has devised a new “systematic framework” on net zero stewardship in partnership with the Institutional Investors Group on Climate Change.
In April, the IIGCC claimed that achieving the goals of the Paris Agreement is likely to require more than $126tn (£96.6tn) of investment in climate solutions until 2050.
How investors engage with companies is also the focus of campaigners, and the new framework contains six steps that are aimed at helping investors ensure their stewardship behaviour can help the world achieve net zero emissions by 2050.
Railpen and the IIGCC are encouraging investors to analyse their portfolios and to use their framework to prioritise companies for engagement, based on these businesses’ importance to both investors’ own objectives and the world’s emissions reduction.
Investors are also told to set net zero alignment criteria, build engagement strategies for priority companies, and develop a baseline engagement and voting policy approach for all companies.
Finally, investors need to make sure asset owners and managers are aligned, and ensure the necessary disclosures are made on their net zero stewardship strategies in the name of transparency.
The toolkit, which currently provides a standard format for engagement on listed equities and bonds, will in future be expanded to include unlisted assets.
“While corporate engagement can be a multi-year process, the toolkit is timely given the imminent AGMs at many of Europe and North America’s largest public companies,” said Stephanie Pfeifer, the IIGCC’s chief executive.
“For those companies putting forward climate transition plans, including via ‘Say on Climate’ votes, the message is clear: only put forward credible plans or expect investors to vote against you.”
