By the Rev. Kirsten Spalding (Ceres) Chair and Rahnuma Chowdhury (UNEP FI) Manager for the Investor Agenda ICAPs Working Group
The latest warnings from the world’s leading scientists urge us to take swift action if we have any chance to prevent the worst effects of the climate crisis. Notably, the Intergovernmental Panel on Climate Change confirms that, even with existing climate policies and commitments, we are still on track to overshoot the Paris Agreement’s 1.5°C goal significantly. Not only that, it reveals that the risks of overshoot are greater and accelerating much more quickly than we previously thought.
While the window to act is closing rapidly, global investor-led efforts to protect the well-being of humanity and our planet are far from over. Investors are increasingly calling on governments and policymakers to accelerate efforts to entrench firm climate policy into legislation. And more investors than ever before are raising their climate ambitions and realising them with robust climate action plans.
The year of ICAPs
One year ago, the Founding Partners of The Investor Agenda — AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP FI — released a new bold framework for investors to develop and publish ICAPs. The ICAPs Expectations Ladder and Guidance helps to meet the Investor Agenda’s shared goal of mobilizing the broader investment community to act on the climate crisis, wherever they may be on their journey. ICAPs encourage investor action across four key focus areas – investment, corporate engagement, policy advocacy and investor disclosure, with governance being an underlying theme across all areas. The ICAPs Expectations Ladder and Guidance also provide investors with clear steps they can take to support the global goal of a net-zero emissions economy by 2050 or sooner.
In other words, the ICAPs framework holds the ambition of net-zero portfolios by 2050 and is for all investors, whether they are climate pioneers or just beginning their transition. It includes four Tiers that detail increasing levels of climate ambition. Investors are encouraged to “climb” the Ladder and demonstrate strong progress toward net zero.
More ICAPs case studies
To generate more global investor momentum around ICAPs, the Investor Agenda is releasing 10 new case studies today, from a regionally diverse range of investors. The first set of 10 case studies were released in January 2022.
With these new case studies, the Investor Agenda can show the breadth of investors developing and publishing ICAPs around the world, with investors from countries including Australia, Bolivia, the Netherlands, the U.K. and the U.S. They also provide testament to the depth and strength of published ICAPs in the market, with many covering all focus areas of ICAPs.
The new case studies include:
AustralianSuper manages more than A$260 billion in members’ retirement savings on behalf of more than 2.6 million members (as of 31 December 2021). One in 10 working Australians is a member of AustralianSuper, the nation’s largest superannuation fund. AustralianSuper’s purpose is to help members achieve their best financial position in retirement. The Fund actively stewards its capital and uses its influence to create long-term value and has a long-standing position of embedding ESG considerations into its investment decision-making to meet this aim. AustraliaSuper’s ICAP case study covers Corporate Engagement and Disclosure within the ICAPs pillars.
Capital + SAFI (Bolivia)
Capital + SAFI is a Bolivian asset manager committed to prioritizing ESG and sustainability goals through its operations and investments inspired by its purpose of investing for better lives. Capital + SAFI’s commitment demonstrates that regardless of a country’s economic or industrial development, misalignment with the Paris Agreement is no longer an option. Capital + SAFI’s ICAP case study covers Investment and Corporate Engagement within the ICAPs pillars.
Nest Corporation (UK)
Nest Corporation has been at the forefront of asset owners’ action to support the net-zero transition. The pension fund developed a Climate Change Policy in 2020/21 which sets out an ambition to align its investment strategy to the 1.5°C global goal by reaching net zero emissions across its investment portfolio by 2050 at the latest. Nest Corporation’s case study covers Corporate Engagement within the ICAPs pillars.
New York State Common (US)
For more than a decade, the New York State Common Retirement Fund (NYS Common), one of the largest public pension funds in the U.S. and recently valued at around $279.7 billion, has been a cutting-edge sustainable investment leader. The Fund has long believed that climate change is one of the most important risks and opportunities for its portfolio and members’ retirement savings. NYS Common’s ICAPs case study covers all pillars of the ICAPs Expectation Ladder, Investment, Corporate Engagement, Policy Advocacy, Disclosure and Governance.
NN Group (Netherlands)
NN Group is an international financial services company that holds approximately $199bn general account assets. NN has disclosed its first set of ambitious and comprehensive targets to support and track its contribution to the global net-zero goal. NN Group’s ICAP case study covers Disclosure within the ICAPs pillars.
Northern LGPS (UK)
Northern LGPS is the partnership between the Greater Manchester (GMPF), Merseyside (MPF) and West Yorkshire (WYPF) Local Government Pension Scheme (LGPS) funds, holding £46bn AUM and representing 880,000 members and over 1,100 contributing employers. Northern LGPS’ ICAP Case study covers Investment within the ICAPs pillars.
Impax Asset Management (UK)
Impax, a global asset manager headquartered in the U.K. with a strong U.S. presence (via the Pax World Funds and other products), has long been a leader and pioneer in integrating climate risk and other sustainability considerations into its investment beliefs and practice and has a storied history of engagement with policymakers and regulators to advocate for integral climate policy. Impax’s ICAP case study covers Policy Advocacy within the ICAPs pillars.
Railpen manages the pensions of over 500,000 members, holding £35bn in AUM. Railpen utilizes target setting, stewardship and engagement with portfolio companies and policy advocacy to support the global transition to net zero, as well as the transition of its own portfolio. Railpen’s ICAP case study covers Investor Disclosure, Corporate Engagement, and Policy Advocacy within the ICAPs pillars.
San Francisco Employees’ Retirement System (US)
The San Francisco Employees’ Retirement System (SFERS) is dedicated to securing, protecting, and prudently investing the pension trust assets and providing promised benefits to the active and retired members of the City and County of San Francisco. To deliver its purpose, SFERS believes it is vital to have a plan to integrate climate risk into its investment policies and to articulate this strategy and plan to its stakeholders. The SFERS ICAP case study covers all pillars of the ICAPs Expectation Ladder, Investment, Corporate Engagement, Policy Advocacy, Disclosure and Governance.
TelstraSuper is Australia’s largest corporate, profit-to-member superannuation fund with around $25 billion of assets invested on behalf of 85,000 members. As a long-term institutional investor in Australian and global financial markets, TelstraSuper has an important role to play in minimising the impact of climate change where possible. TelstraSuper’s ICAP case study covers Investment, Corporate Engagement, Disclosure and Governance within the ICAPs pillars.