PRI-backed sovereign engagement group expands

The Collaborative Sovereign Engagement on Climate Change has expanded to include 18 new investors

Eighteen new investors have joined the Collaborative Sovereign Engagement on Climate Change, an initiative that was launched in September last year to improve dialogue with sovereigns over climate change, starting with Australia.

The 18 new investors are Achmea, Ardea Investment Management, Brown Advisory, Candriam, Colchester Global Investors, Fidelity International, First Sentier Investors, IFM Investors, Insight Investment, Jupiter Asset Management, LGPS Central, Morgan Stanley Investment Management, Munich Re, Neuberger Berman, Pendal Group, QIC, Rest and Sumitomo Mitsui Trust Asset Management.

They will join existing members of the organisation’s advisory committee, which are: Aviva Investors, BNP Paribas Asset Management, Brandywine Global, HESTA, Nordea, Robeco and Schroders.

The initiative has the support of the UN-supported Principles for Responsible Investment (PRI).

Through the organisation, investors’ efforts are essentially fourfold. They are aiming to:

  • Bridge the gap between current actions and a Paris-aligned emissions reduction trajectory;
  • Put in place detailed net-zero transition plans with supporting policies, budgets and investment structures;
  • Create greater climate adaptation and resilience to avoid worsening disruption and damage from physical risks;
  • Improve disclosure of sovereign exposure to climate risk.

“Collaborative sovereign engagement is a relatively new investor practice and PRI is excited by the growing signatory interest in joining this initiative,” said PRI chief executive officer David Atkin. “Investors are using increasingly sophisticated measures to assess sovereign climate risk in their investments. Over time this may affect capital costs for sovereign and other issuers in relevant markets.

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“Genuine, sustained and two-way engagement can help policymakers better understand the growing practice and expectations of international investors on climate change response.”

“The engagement group has been encouraged by the clear sign of momentum since 2022 with the recent national and state-based policy advancements on climate change. Through ongoing engagement, we aim to contribute to this momentum by sharing the perspective of institutional investors on climate policy development in Australia to hold the Australian government to account for meeting its stated climate commitments,” said advisory committee member and head of engagement at Robeco, Peter van der Werf.