Asset owners set out climate stewardship expectations
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Pension funds and providers managing £1.2tn have signed a new Asset Owner Statement on Climate Stewardship. Responding to asset managers’ requests, the statement sets out their expectations regarding climate stewardship amid a US backlash against climate risk management.
The statement by the People’s Partnership, Brunel Pension Partnership and Scottish Widows has been signed by 26 asset owners and calls on asset managers to evolve and strengthen their climate stewardship strategies. The funds hope to empower managers’ stewardship teams to deliver on asset owner climate objectives as part of their mandates.
The statement comes after the Net Zero Asset Management initiative suspended its activities last month, following the departure of several US-based managers fearing repercussions for being involved in climate change collaborations while Donald Trump is president. The new statement’s second of five principles is to prioritise collaboration “where permissible”.
Leanne Clements, head of responsible investment at People’s, said that “in these challenging times, it is now more important than ever as an asset owner community to send a strong collective principle-based signal to our asset managers as to what we expect of them”.
The authors cite “an ongoing and material divergence between asset owner expectations and implementation of climate stewardship that limits progress towards a net zero world and better outcomes for beneficiaries”.
In 2023, research found that asset owners and managers are misaligned on oil and gas. The study was introduced at an ‘Asset Manager-Asset Owner Aligning Expectations’ roundtable to review voting activities in the oil and gas sector.
Brunel’s head of stewardship Vaishnavi Ravishankar said the statement responds directly to feedback from asset managers to hear from asset owners jointly on climate stewardship expectations. Ravishankar called it “an important signal to the market”.
Shipra Gupta, investment stewardship lead at Scottish Widows, said: “Systemic risks and opportunities, like climate change, require systemic and systematic interventions across the investment value chain.”
The statement's five principles are:
Industry/market and public policy engagement should be core to the climate stewardship proposition across asset classes
Where permissible, asset managers should prioritise collaborative initiatives to achieve greater impact and embed efficiencies in engagement activities
Asset managers’ prioritisation framework for company engagement should be rooted in a robust theory of change that delivers maximum impact
A systematic approach to voting is imperative
The stewardship function needs to be appropriately resourced
Signatories as of 10 February 2025:
Aegon UK
Australian Ethical Investment
Border to Coast Pensions Partnership
Brunel Pension Partnership
Church of England Pensions Board
Cornwall Pension Fund
Environment Agency Pension Fund
Greater Manchester Pension Fund
LGPS Central
London Pensions Fund Authority
Lothian Pension Fund
Merseyside Pension Fund
Nest
North East Scotland Pension Fund
Northern Ireland Local Government Officers’ Superannuation Committee
Oxfordshire Pension Fund
Pension Protection Fund
Pensionskasse Basel-Stadt
Phoenix Group
School Sisters of Notre Dame Collective Investment Fund
Scottish Widows
Shell Contributory Pension Fund
Sisters of Charity of St. Vincent dePaul of New York
SVVK-ASIR
The People's Pension
West Midlands Pension Fund
Do investors need to be clearer about their stewardship expectations while climate sceptics are in power in the US?
