The investor community is still in the early stages of addressing climate change risks and opportunities, given significant data limitations and the forward-looking nature of climate-related risk assessments. We believe that companies exhibiting better disclosure of their climate change mitigation strategies, emissions performance, and related material environmental metrics are likely to demonstrate better risk-adjusted performance over the long run.
Considering the current climate-related disclosure landscape, we are committed to the following active management strategies in alignment with our commitments as a PRI signatory:
- To exercise shareholder voice by voting to promote climate-related disclosure
- To engage with investee companies and promote climate-related disclosure
- To advocate with policymakers, regulators and stock exchanges to encourage climate-related disclosure guidance
- To take an active role in collaborative research regarding appropriate management of key elements such as carbon, plastics, methane and water, and promote best practices and benchmark firms’ performance on these metrics over time
For public issuers, we identify firms that do not disclose carbon emissions and proceed to engage with a select group of them to promote climate resilience strategies and related disclosure. We assess public equities external managers regarding whether their active ownership practices encourage climate-related disclosure, as featured in their proxy voting guidelines and engagements with companies.
For illiquid investments, we factor climate-related risks into our due diligence processes which includes consideration of the asset or fund’s overall climate resiliency and its management of material environmental risks.