INSIGHT by IIGCC
〉The questionnaire will support a more consistent approach to the relationship between asset owners and asset managers in terms of exercising climate-related stewardship responsibilities and reporting on climate engagement.
〉The questionnaire was produced by IIGCC’s Asset Owner Working Group and was reviewed by over 50 stakeholders, including asset owners, asset managers, investment consultants and multiple regulators.
〉It builds on IIGCC’s Net Zero Stewardship Toolkit and aligns with the Net Zero Investment Framework to promote consistency on engagement reporting.
IGCC has released an Asset Owner Stewardship Questionnaire – a resource to be used internally by asset owners in meeting their own individual net zero goals by incorporating climate stewardship into selection, appointment and monitoring of external asset managers.
Specifically, the questionnaire provides asset owners who choose to use it with qualitative questions for due diligence when selecting an asset manager, and quantitative reporting when monitoring asset managers.
| Investor and stakeholder consultation
The questionnaire was produced by IIGCC’s Asset Owner Working Group, which contains representatives from 10 organisations. Members of the group include Aegon UK, Guys & St Thomas’s Foundation, Brightwell, Phoenix Group, and Nest. IIGCC also engaged with the Investment Consultants Sustainability Working Group and members of the Stewardship Regulators Group (SRG) more closely involved in stewardship policy and regulation when developing the questionnaire.
Asset owners who opt to use the questionnaire are encouraged to adopt it in full to enable a more consistent approach to how stewardship and engagement are measured by them, and to promote better data collection by asset managers. However, the questionnaire can also be adopted into asset owners’ existing selection and monitoring processes in whatever way they find most useful and appropriate.
IIGCC will continue to work with members to support implementation of best practice on climate stewardship using the questionnaire alongside the Net Zero Stewardship Toolkit and other key resources, tools and guidance.
“While asset owners can and do engage directly with portfolio companies, many enlist asset managers to implement engagement strategies. Given that effective engagement with companies is the primary tool that investors have to progress real world emissions reductions and meet their own net zero goals, it is vital for asset owners to have visibility over the extent to which externally appointed asset managers are engaging companies in line with their climate-related objectives.”
“Overall, the guidance will be a valuable tool for asset owners to use to pursue their own climate-related goals.”
-Stephanie Pfeifer, CEO, IIGCC
“Over 73% of our UK customers consider climate risk to be an important risk when investing, and savers’ pension pots are at risk if investors do not adequately manage financially material climate risks. However, right now the industry does not have an effective way to assess the quality of net zero stewardship. It is fantastic to play a part in this much needed IIGCC working group, looking to help increase accountability and alignment between asset owners and managers. A good success measure for this work would be more transparency and outcomes-focused practice on net zero engagement.”
-Samantha Chew, Stewardship Lead, Aegon UK
“The Investment Consultants Sustainability Working Group (ICSWG) is pleased to have collaborated with IIGCC on the development of this questionnaire. The questionnaire is aimed at focusing engagement specifically on climate issues. Over time, it is intended that it will be integrated into the ICSWG engagement reporting guide, with the intention of standardising its adoption across the asset owner and asset manager community.”
-Alison Leslie, Chair of the Raising the Bar Workstream, Investment Consultants Sustainability Working Group
“As an asset owner with a net zero commitment, it is crucial that the asset managers we work with help us to achieve this goal. It is important that not only their engagement strategies align with our objectives but that they also communicate and report on these in a consistent and transparent way. Without this, it is difficult to understand and assess their effectiveness. This questionnaire will be a valuable resource for asset owners, helping them to address the challenges of transparency in relation to climate stewardship.”
-Guys & St Thomas’s Foundation
| about
IIGCC brings the investment community together to work towards a net zero and climate resilient future. We create change the world needs by unlocking investor action on climate change.
Our work supports investors in generating returns for clients and beneficiaries, which in turn provides financial wellbeing for future generations. We work with our members to address climate risk and ensure they are well positioned to make the most of investment opportunities offered by climate mitigation and adaptation efforts, ensuring that their investments contribute towards a better world for us all to live in.
Our team supports investors to create practical solutions that can make a real difference in tackling climate change – providing guidance and support on investment practices, policies and corporate behaviours that have real impact and deliver change that the world needs. For more information visit www.iigcc.org and @iigccnews
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
