Church of England : Thirteen Leading International Asset Owners Launch Major Initiative to Embed Climate Concerns in Investment Decisions

Contact

Mark Arena - Head of Financial Communications - Church of England
[e-mail]
020 7898 1221 / 07949 933714
Chris Le Marquand - Media & PR Officer - Church of England
[e-mail]
020 7898 1682 / 07464 548157

Notes

Progress in reducing carbon emissions is measured against both the two-degree international target, and against national pledges made at the Paris United Nations Conference of the Parties - the Nationally Determined Contributions (NDCs).
The founding members (AUM of £370bn) are: The Church Commissioners for England, the Church of England Pensions Board, CBF Church of England Funds, the Central Finance Board of the Methodist Church, the Environment Agency Pension Fund, the Local Authority Pension Fund Forum, RPMI Railpen, the Swedish National Pension Funds (AP1, AP3 and AP4), USS, Wespath Benefits and Investments and the West Midlands Pension Fund.
The asset managers who are supporting the initiative (AUM of £1.7trn) are: Aviva Investors, BNP Paribas Investment Partners, Hermes Investment Management, PGGM and Standard Life Investments. HermesEOS will also be using the tool in support of its engagement with investee companies. BNP Paribas Securities Services, a leading global custodian with $9 trillion in assets under custody, also actively supports the initiative.
The Church of England is involved through its National Investing Bodies (NIBs) - the Church Commissioners for England, Church of England Pensions Fund, and CBF Church of England Funds.
Additional quotes from partners
Barbara Boigegrain, CEO and General Secretary of Wespath Benefits and Investments, said 'For some years, Wespath Benefits and Investments (pension fund agency of The United Methodist Church) has recognized the transition underway to a low-carbon global economy and the need for us to understand the long-term trends affecting our investments. We will use our leadership position to influence other North American funds and investors to use the TPI in analysing their portfolios.'
Euan Stirling, Head of Stewardship and ESG Investment at Standard Life Investments, said 'The Transition Pathway Initiative is an important step forward in the necessary route towards lower carbon intensity. A large gap currently exists between governmental commitments on emissions made in Paris in 2015 and the preparations of companies to help meet those challenges. The TPI will provide a useful tool for us as investors to gauge how effectively companies are addressing the sustainability of their business plans.'
Sir Andreas Whittam Smith, First Church Estates Commissioner of the Church Commissioners for England said 'The Transition Pathway Initiative is a significant intervention by church asset owners and others. It will enable us to have a new conversation with companies based on a rigorous understanding of where they sit on the transition to a low-carbon economy, and to follow through on the commitments we have made in our climate change policy.'
Johan Magnusson, Chief Executive of AP1 said 'This initiative fills an information gap and will help us and other investors to make more informed investment decisions. We are pleased to be involved at this early stage in the development of TPI, an initiative well in line with the AP1's sustainability strategy.'
Elizabeth Fernando, Head of Equities at USS said 'As a long-term investor USS wants to be able to assess how companies are managing climate change and the risk it poses to their business. The TPI provides a tool for us to do this and as a result will allow us to make better informed investment decisions improving financial returns for our members and beneficiaries.'
Kieran Quinn, Chair of the Local Authority Pension Fund Forum said: 'As a recognised leader in engaging with companies, LAPFF's participation in the Transition Pathway Initiative will enhance demonstrating the progress of our engagements on carbon risk with high impact companies on the necessary transition to a low carbon economy.'
Bruce Duguid, Director, EOS, Hermes Investment Management said 'The Transition Pathway Initiative provides a useful framework for setting stretching but feasible corporate engagement objectives on climate change. We have already piloted this approach in our engagement with coal-exposed companies.'
Patricia Espinosa, Executive Secretary of the UN climate convention (UNFCCC) said 'I applaud the new Transition Pathway Initiative and its founding members. It represents yet another potentially powerful way of aligning real-world global investments with the real-world urgency of meeting the goals, aims and aspiration of the Paris Climate Change Agreement'.
Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change said 'IIGCC welcomes the launch of the Transition Pathway Initiative. As investors seek to help drive the changes required to implement the Paris Agreement, it is great to see new tools emerging that asset owners and managers can employ to assess climate transition risk through benchmarking corporate climate disclosure and evaluating how well a company is positioning itself as part of the low carbon transition.'
Erik Solheim, Head of UN Environment said 'Climate change poses an unprecedented risk to investments. For the sake of portfolios - and the planet - it is important that asset owners take action now. That's why we at UN Environment welcome the Transition Pathway Initiative and the leadership of the asset owners backing it. Building on Paris commitments, it is another step on the transition to a low-carbon economy.'