New case studies aim to generate more investor climate action plans and accelerate the global net-zero transition
12 January 2022
The Investor Agenda highlights the leading best practices from Allianz, Aware Super, CalSTRS, Cathay Financial Holdings, FAMA Investimentos, IFM Investors, Mirae Asset Global Investments, PensionDanmark, Sumitomo Mitsui Trust Asset Management, UniSuper in issuing and implementing Investor Climate Action Plans (ICAPs)
12 January 2022: In an effort to generate worldwide momentum that will lead to more institutional investors implementing bold climate action plans, the Investor Agenda published today a set of case studies highlighting the leading best practices for Investor Climate Action Plans (ICAPs).
The 10 investors featured in the case studies are from 5 continents and include Allianz (Germany), Aware Super (Australia), CalSTRS (US), Cathay Financial Holdings (Taiwan), FAMA Investimentos (Brazil), IFM Investors (Australia), Mirae Asset Global Investments (South Korea), PensionDanmark (Denmark), Sumitomo Mitsui Trust Asset Management (Japan) and UniSuper (Australia).
The case studies detail how their climate action plans are aligned with some or all of the actions outlined in the Investor Agenda’s ICAPs Expectations Ladder, released in May 2021. The framework sets out clear expectations for ICAPs, wherever investors are on their climate journey, including steps for investors to deliver on their climate commitments and support the global goal of a net-zero emissions economy by 2050 or sooner. The Ladder calls for actions within the four interlocking areas of the Investor Agenda: investment, corporate engagement, policy advocacy, and investor disclosure, with governance as a cross-cutting theme across all areas.
The case studies come as more than 271 asset managers and asset owners with nearly $60 trillion in assets under management have now committed to issuing ICAPs through the Net Zero Asset Managers Initiative and Paris Aligned Investment Initiative, both of which have been endorsed by the Investor Agenda and the United Nations Race to Zero campaign. Asset owners in the UN-convened Net-Zero Asset Owner Alliance are committing to meet actions in line with the ICAPs framework.
“The Investor Climate Action Plans (ICAPs) are best practice climate transition plans for investors. We are publishing these case studies to showcase examples of investors taking action to publicly disclose ICAPs, and to improve transparency and accountability in transition planning,” said Rebecca Mikula-Wright, CEO of AIGCC and IGCC, and founding partner of the Investor Agenda. “The ICAPs are a critical way to help mobilize greater numbers of investors globally, but especially in Asia Pacific, where we need to see more investors using these frameworks to help with climate integration into their portfolios. We believe they will empower other investors to map out their own climate action plans and, in turn, encourage others in the region and around the world to do so too.”
Governments also acknowledge the unique power that investors hold when it comes to transitioning to a net-zero future. At COP26 in November 2021, the United Kingdom Government made a bold announcement that it would mandate that asset managers, regulated asset owners, and listed companies publish transition plans that consider the UK’s 2019 net-zero pledge.
“Without transparent investor climate action plans it will be impossible to hold asset managers and asset owners accountable to their net zero pledges, and drive the necessary investor action needed to mitigate the global climate crisis,” said Ceres CEO and President Mindy Lubber, and founding partner of the Investor Agenda. “It is critical that the momentum we are seeing around these action plans continues to build with investors worldwide. The bottom line: every investor needs to have a plan if we are going to get to net zero.”
The ICAPs Expectations Ladder uses a tiered system approach, from Tier 4 to Tier 1, to measure progress, with Tier 4 being where investors are beginning to think about climate action and Tier 1 being where investors are net-zero standard setters. Investors need to meet most, if not all, of the actions in a Tier before they can progress to a higher Tier. Among the case studies released today, most of the investors sit in the highest ambition Tiers in one or more areas. We have also included examples where investors may be taking intermediate actions at a Tier 3 level. These are intended to cross a diverse range of tiers for guidance to all investors including those just starting out their ICAP journey.
“Following the UK Government’s decision to mandate net-zero transition plans for the finance sector, we expect more governments and investors will follow suit by embracing the ICAP framework as the norm,” said CDP CEO Paul Simpson and founding partner of the Investor Agenda. “We hope to see these ICAP case studies catalyze more investors to increase ambition and implementation towards net-zero portfolios.”
Highlights of the ICAPs case studies include:
Allianz is committed to decarbonizing its proprietary investment portfolio to net-zero emissions by 2050. It has committed to science-based targets in line with 1.5-degree pathways and developed a strategy that focuses on setting intermediate targets for two of the highest emitting sectors – Utilities and Oil & Gas. This strategy is aligned to Tier 1 in the ICAPs Expectations Ladder for the Investment focus area.
Read the Allianz ICAP case study here.
Aware Super (Australia)
Aware Super’s Climate Change Portfolio Transition Plan (CCPTP) is an industry-leading example of how an asset owner is managing climate change risk and transitioning its $150bn portfolio to a low-carbon economy while continuing to deliver members with long-term, sustainable returns. It incorporates portfolio-wide short, medium and long-term targets, advocates for a just transition, stronger policy and regulatory support, and outlines an effective long-term engagement program to reach net zero by 2050 and aligning to a 1.5 degree scenario. Based on the case study, Aware Super has assessed itself as being Tier 3 in the Investor disclosure ICAPs pillar.
Read the Aware Super ICAP case study here.
CalSTRS (California State Teachers’ Retirement System) has long recognized that climate change is a significant and growing risk for investors and economies. CalSTRS’ plan addresses all focus areas of the ICAPs Expectation Ladder – investment, corporate engagement, policy advocacy, investor disclosure and governance – and includes a target to align its investment portfolio to net-zero by 2050 or sooner.
Read the CalSTRS ICAP case study here.
Cathay Financial Holdings (Taiwan)
Cathay is a leader across Asia in integrating climate change risks, opportunities and other ESG factors into its investment and other business processes, and has implemented multiple climate-related initiatives through its Corporate Sustainability Committee and TCFD Task Force. Cathay is currently undertaking multiple Tier 1 and Tier 2 actions of the ICAPs ladder across the corporate engagement and policy advocacy pillars.
Read the Cathay Financial Holdings ICAP case study here.
FAMA Investimentos (Brazil)
FAMA Investimentos has established themselves as a leader in ESG investing and active portfolio decarbonization. FAMA Investimentos’ ICAP addresses all focus areas of the ICAPs Expectation Ladder. FAMA is aligned to Tier 1 in Policy Advocacy and Investor Statements, and Tier 3 Investor Disclosure around carbon emissions.
Read the FAMA Investimentos ICAP case study here.
IFM Investors (Australia)
IFM Investors is focused on mitigating the financial risks of climate change and supporting the transition to a net zero carbon economy. IFM is developing a firm wide climate strategy to plan its pathway to reducing emissions across all of its asset classes targeting net zero by 2050, which will include interim 2030 emissions reduction targets and aligns with Tier 2 in the Investment ICAPs pillar.
Read the IFM Investors ICAP case study here.
Mirae Asset Global Investments (South Korea)
Mirae Asset Global Investments (Mirae Asset) takes a collaborative approach in managing a fully diversified investment platform, and is working towards multiple Tier 2 actions within the ICAPs ladder under the investment pillar. Mirae highlights their approach to integrate climate change in their traditional investment strategies through thematic investing, divestments, and engagement, as well as in assessing climate-related risks as part of their risk management processes, and monitoring temperature alignment for some parts of their portfolio.
Read the Mirae Asset Global Investments ICAP case study here.
PensionDanmark, a Danish labor market pension fund, is committed to contribute to a more sustainable society. Its case study predominantly focuses on its actions within the ICAPs Ladder around Corporate Engagement, particularly through its use of tools such as the Transition Pathway Initiative (TPI), a global asset-owner led initiative.
Read the PensionDanmark ICAP case study here.
Sumitomo Mitsui Trust Asset Management (Japan)
Sumitomo Mitsui Trust Asset Management (SMTAM) is undertaking multiple Tier 1 and 2 actions within the ICAPs ladder on Policy Advocacy including being a longtime supporter of collaborative investor statements, actively participating in member-based associations and encouraging governmental bodies to include climate change as part of their agenda. SMTAM also undertakes multiple actions across different tiers of the ICAPs Corporate Engagement pillar as an active participant in multiple collaborative engagement programs, on top of bilateral engagements with portfolio companies on climate change, and has established an escalation strategy on its voting guidelines.
Read the Sumitomo Mitsui Trust Asset Global Asset Management ICAP case study here.
UniSuper is committed to a 2050 net-zero portfolio ambition. UniSuper will use the ICAP framework and SBTi methodology to set future short-term targets. It predominantly focuses on Disclosure, where it is aligned to Tier 1 of the ICAPs Expectation Ladder and Corporate Engagement, which is aligned to Tier 2.
Read the UniSuper ICAP case study here.
“The case studies serve as the global standard for necessary transition, illustrating climate action plans in ways that investors can understand,” said Eric Usher , Head of the United Nations Environment Programme Finance Initiative (UNEP-FI), a founding partner of the Investor Agenda. “Our hope is that these case studies support investors to prioritize their climate action in tackling the climate emergency and become the central tool that inspires more investors to issue and implement ICAPs across the globe.”
“Encouraging and supporting investors to take action on sustainable investment, corporate engagement, climate disclosure and policy advocacy is critical for the broader investment community,” said Sagarika Chatterjee, Director of Climate Change at the Principles for Responsible Investment. “These ICAP case studies should serve any investor – regardless of where they are in the world or whether they are a novice or expert on climate action – to map, track and prioritize climate action within their portfolios and activities.”
“For the transition to a net-zero economy to succeed, investors must play an integral role in delivering meaningful, real-world impact,” said IIGCC CEO Stephanie Pfeifer, and founding partner of the Investor Agenda. “Against this backdrop, the ICAP case studies provide a valuable reference to all investors yet to outline and implement climate action plans.”
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About The Investor Agenda
The Investor Agenda is a common leadership agenda on the climate crisis that is unifying, comprehensive, and focused on accelerating investor action for a net-zero emissions economy. The founding partners of The Investor Agenda are seven major groups working with investors: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative.