COP26 On Stewardship
By Amy Quirk
There is power and promise in rigorous stewardship of our collective financial resources. COP26 has guidance to benefit the environment.
On Wednesday, November 3, 2021, COP26 presented “Pensions with Impact – Adopting a Transitional Mindset for a Better Future.”
Sarah Gordon, Chief Executive Officer of the Impact Investing Institute, a U.K. non-profit noted: “You may not know where your pension money is invested, [but] you have the power to influence where that money goes so that that money — your money — can deliver real change, real impact.”
“[I]nvestments [can] deliver a competitive financial return alongside a positive impact for people and the environment … to deliver a Net Zero.”
“Impact investing is not just for pension schemes; it’s the future of financial markets for the 21st century,” as we review investments “through the lens of risk, return and impact.”
The session included a video highlighting specific examples of “some of the positive impact that pension investments can have.”
Panel moderator, Jamie Broderick, Director and Lead Expert at the Impact Investment Institute: “We are here at COP26 not just for a transition to Net Zero, but for a Just Transition to Net Zero.”
He said the projects highlighted in the video were funded “in the context of the communities … making sure that the projects were relevant for the communities and supportive for the communities.”
From a pension fund manager:
Debbie Fielder, Deputy Director, Clwyd Pension Fund (a public sector pension scheme) reported that Clwyd has a history of investing in renewable energy. (session 16:22 – 21:16)
Ms. Fielder pointed out that while many pension funds hire consultants, Clwyd worked with an independent, progressive consultant. She recommended that pension funds starting impact investing, choose consultants aligned with the fund’s interest in impact investing and that they train the pension fund trustees in basic principles.
From an investor:
Shami Nissan, Head of Responsible Investment, Actis (https://www.act.is ).(session 21:17 – 27:46)
“Actis is a leading global investor in sustainable infrastructure. We deliver consistent, competitive returns, responsibly, through insights gained from trusted relationships, local knowledge and deep sector expertise.”
Ms. Nissan noted that Actis has $19b in assets under management primarily in Latin America, Asia & Africa. “About 1/2 of the capital we manage today is on behalf of pension plans.” Geography is important for many reasons, including that: “The natural resources needed for renewables [wind & sun] are much stronger in the Southern Hemisphere.”
From a regulator:
Sacha Sadan is Director of ESG at the U.K.’s Financial Conduct Authority. FCA: “Transition to a Net Zero economy will require an entirely different approach to markets and investment products in the U.K. and internationally.”
Mr. Sadan pointed out that: “We need consistent sustainability metrics” to get to Net Zero. We “need metrics year by year.”
Closing guidance from a pension fund manager, an investor and a regulator:
Ms. Fielding summed it up: “Imagine a 1,000 piece jigsaw and every piece matters for that final picture.”
Please consider viewing this valuable COP26 session for more guidance
