Insurers found to be underutilising stewardship/advocacy opportunities on climate policy

Written by Adam Cadle

03/12/2024

A limited number of the world’s largest insurers and pension funds representing over £17trn in assets are utilising their influential position to drive climate policy advocacy in line with science-based pathways to net-zero, new analysis has found, and that the majority are abdicating responsibility in this area.

Non-profit think tank, InfluenceMap, said this is despite 22 of the 30 assessed asset owners having set net-zero commitments.

The analysis found that there is an overall lack of stewardship on climate policy engagement among asset owners, with 73% scoring a D+ or below. Generally, low scores are driven by low levels of transparency on stewardship activities, the think tank stated.

Just 13 of the 30 asset owners assessed mentioned policy engagement in their stewardship policies and processes, and just six have started to integrate climate-related policy engagement more systematically into their policies.

Sixty per cent of asset owners provide either only summary statistics about engagements or no details at all about stewardship, six of which are members of the Net-Zero Asset Owner Alliance.

InfluenceMap said the leaders on stewardship include Phoenix Group, Aegon, and the New York City Retirement Systems (NYCRS). “These institutions have led collaborative engagements and filled shareholder resolutions on climate lobbying at investee companies, and have engaged with, or are monitoring, their asset managers to improve stewardship on climate lobbying on their behalf.”

The analysis also found that 76% of asset owners demonstrate policy engagement that is at least partially aligned with science-based goals. However, almost all (93%) fall under the threshold for ‘strategic engagement’, leaving the bulk of impactful policy engagement to the more active industry associations.

No asset owner, according to the analysis, is fully transparent around its indirect lobbying via industry associations. Seven of the 30 asset owners assessed maintain links to industry groups whose climate policy advocacy is misaligned with science-based pathways to limit warming to 1.5°C, and who have actively obstructed climate policies for the financial sector and the real economy.

Cleo Rank, program manager at InfluenceMap said: “Although it is encouraging to see a few asset owners actively stewarding companies and asset managers on climate lobbying, and engaging in robust direct policy advocacy, these entities represent only a fraction of the sector. By failing to engage, many asset owners are ceding their influence to more actively engaged industry associations that are often advocating against meaningful change. The commitments of groups like the NZAOA are at risk of being undermined if their members do not fully buy into its recommendations.”

Related Articles