Engaging with companies to put net-zero plans in place

We said...

We will ensure that at least 70% of financed emissions in material sectors resulting from our listed equities exposure are either assessed as net zero, aligned with a net-zero pathway, or the subject of direct or collective engagement and stewardship actions. By 2030, we will ensure that at least 90% of financed emissions in material sectors resulting from our listed equities exposure meet these standards. At 31 December 2021, none of our listed equity holdings in material sector companies were assessed as being net zero or aligned to a net-zero pathway. This reflects the reality that at present very few companies globally meet the Net Zero Investment Framework (NZIF) standards to be considered aligned to net zero. 

We will ensure that our asset manager, LPPI, continues to engage robustly on our behalf with sufficient material sector companies to achieve the engagement goal.

Where are we now?

We are increasing our engagement activities. In 2023, we supported several collaborative campaigns. 

• We joined IIGCC’s (the Institutional Investors Group on Climate Change) NZIF, becoming part of the lead engagement group for three companies on the Net Zero Engagement Initiative (NZEI) engagement list that are in our portfolio 
• We supported ShareAction’s campaign to lobby banks to end financing of new oil and gas fields 
• We supported the joint IIGCC/UN letter to UK Prime Minister Rishi Sunak in September 2023 to convey concern about changes in government policy about net zero timescales. 
• We supported the CDP’s Science-based targets initiative. 

Our manager LPPI undertakes voting on all assets on our behalf. As a part of that activity, we ask them to report to us how they have voted on all resolutions which are subject to a Climate Action 100+ alert, or a climate-related alert by the Local Authority Pension Fund Forum (LAPFF), and to provide rationale for instances where they have voted differently to the alert recommendation. 

We also expect LPPI to exercise ownership rights in alignment with our policies, including our climate change policy expectations. We have continued to engage with LPPI to support our commitment to investing in climate solutions.

We have also participated in investor working groups including the IIGCC; the LAPFF, which provides support on net zero activities; ShareAction (including their campaign to lobby banks to stop financial fossil fuel extraction); and the Occupational Pensions Stewardship Council, which also offers support and collective action opportunities for members on a range of topics including climate change related issues. 

The table below summarises the progress of all our engagement efforts:

Note: A change in methodology in 2022 adjusted the categories impacting some companies.