5: Stewardship to Drive Change

The CACEIS Climate Change Briefing

In this episode of The Climate Change Briefing, we explore the important role of stewardship, which encompasses engagement, voting and escalation tactics, such as asking questions at a company annual general meeting. As climate risk becomes more well-understood, stewardship is going to be an important governance tool for pension schemes and trustees.

Pat Sharman of CACEIS is joined by Caroline Escott, Senior Investment Manager – Active Ownership at Railpen, David Kneale, Head of UK Equities at Mirabaud Asset Management and Janice Turner, Co-Chair of the Association of Member Nominated Trustees, who were behind Red Lines Voting.

We begin by unpacking what good looks like in stewardship, breaking it down into three key areas - material, meaningful and measurable. We explore why asset managers should explain how assets have been managed in alignment with clients’ climate policies and why it’s important that portfolio managers and pension scheme trustees must be aligned when it comes to climate objectives.

We tackle voting, and ask ‘why should pension schemes set their own voting policies’? We then delve into the important initiative called Red Lines Voting, which is designed to provide a framework for pension schemes and trustees on voting around ESG and climate issues.

And should trustees engage or disinvest? This is a key question that crops up time and time again when pension schemes and trustees set their ESG and climate policies. We provide some key pointers.

We end the podcast by looking at the concept of flying blind. This is when companies don’t reflect the material risks of climate change in their annual report and accounts.

There’s no doubt that stewardship should form an important part of a climate strategy that pension schemes and trustees set themselves and we hope this podcast can shed some light on the most important concepts of stewardship.
A Whistledown Production for CACEIS