Investor Guide: Investor Climate Action Plans & transition planning


Acting on the climate crisis is more important than ever before. Scientists warn that without fast and collaborative climate action, a 1.5°Celsius world may be out of reach. By increasing financial investment and encouraging essential institutional investors and financial institutions and all levels of governments to act, we have a shot at limiting global warming and protecting our economy and communities from the most devastating impacts of the climate crisis. 

Investors and the broader finance sector have a critical role to play within this context. It is clear investors need to take effective climate action – through making bold net-zero commitments, implementing robust climate action plans and advocating for strong climate policies and regulations. With multiple climate initiatives across different asset classes, sectors, and geographies, investors can find the landscape complex and confusing. 

That’s where the Investor Agenda comes in.  

The collaboration’s Founding Partners — AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP FI — recognize that the proliferation of these initiatives have been difficult to navigate. It is one of the many reasons that they work together to develop clear expectations and share the best guidance for investors to take climate action.  

In May 2021, the Founding Partners released a new framework designed specifically for investors to develop and publish Investor Climate Action Plans or ICAPs. The ICAPs Expectations Ladder and Guidance aims to bring clarity to the steps investors should take to act on climate change and help them understand how the multiple initiatives and different frameworks and methodologies all relate. ICAPs encourage investor climate action across four key focus areas – investment, corporate engagement, policy advocacy and investor disclosure — with governance being an underlying theme across all areas. It is our hope that by providing this resource, we will help to raise investor climate ambition and action.  

So how does the ICAPs Expectations Ladder and Guidance differ from other resources?  

The ICAPs framework differs from other frameworks released by other climate initiatives such as Glasgow Financial Alliance for Net Zero (GFANZ) and Race to Zero since it is an industry-specific and designed for investors, while the GFANZ framework is for the broader financial industry and the Race to Zero framework is cross-sectoral. The ICAPs framework is complementary and aligned to these frameworks.  

The Investor Agenda also welcomes the work of the UK’s Transition Plan Taskforce towards mandating climate transition plans and developing clear requirements. Over time, the Investor Agenda hopes to see similar action taken in more regions globally. While gaps persist in existing policies and regulations, as a voluntary program, ICAPs are designed to fill the gap for investors looking to take effective climate action. Investors can also take a leading role in closing gaps in policies and regulations through active participation in global and regional policy advocacy. The Investor Agenda’s annual Global Investor Statement to Governments on the Climate Crisis was created to show the unified investors calling for greater climate policy ambition and action presents a critical opportunity for investors to stay engaged in advocacy. Once key policies and regulations are in place, they create an enabling environment for investors to allocate capital and engage with investee companies for climate positive outcomes.  

ICAPs are designed as a useful stepping-stone to fill the gap while regional regulators and global policymakers move to entrench much needed climate legislation for investors and as investors embrace transition planning as part of business-as-usual. Once public and private sectors are in sync with climate action both regionally and eventually globally, we hope to see a sustainable future, underpinned by a resilient net zero economy, where frameworks are no longer needed.