Thirteen leading international asset owners and five asset managers with over £2 trillion under management launched the Transition Pathway Initiative (TPI) on 11 January to better understand how the transition to a low-carbon economy affects their investments. The TPI will assess how individual companies are positioning themselves for the transition to a low-carbon economy through a public, transparent online tool. The heads of funds involved launched the initiative at the opening of the stock market at the London Stock Exchange.
The online tool developed by the TPI – available at transitionpathwayinitiative.org – tracks a company’s management quality and carbon performance.
The initiative has been led by the Church of England’s National Investing Bodies and the Environment Agency Pension Fund in partnership with the Grantham Research Institute at the London School of Economics. Data has been provided by FTSE Russell.
The founding members are: The Church Commissioners for England, the Church of England Pensions Board, CBF Church of England Funds, the Central Finance Board of the Methodist Church, the Environment Agency Pension Fund, the Local Authority Pension Fund Forum, RPMI Railpen, the Swedish National Pension Funds (AP1, AP3 and AP4), USS, Wespath Benefits and Investments and the West Midlands Pension Fund.
The asset managers who are supporting the initiative are: Aviva Investors, BNP Paribas Investment Partners, Hermes Investment Management, PGGM and Standard Life Investments. HermesEOS will also be using the tool in support of its engagement with investee companies. BNP Paribas Securities Services, a leading global custodian with $9 trillion in assets under custody, also actively supports the initiative.
Adam Matthews, Co-Chair of the Initiative and Head of Engagement for the Church Commissioners and Church of England Pensions Board, said “The Transition Pathway Initiative is a tipping point for the market. The Initiative will identify companies that are aligned with the transition to the low-carbon economy and those most exposed to climate transition risk. There can be no doubt about the seriousness with which asset owners are taking account of this risks and it will be a key feature in the discussions we will be having with companies over the coming years.”
Elizabeth Fernando, Head of Equities at USS said "As a long-term investor USS wants to be able to assess how companies are managing climate change and the risk it poses to their business. The TPI provides a tool for us to do this and as a result will allow us to make better informed investment decisions improving financial returns for our members and beneficiaries."
The full press release is available on the Church of England’s website.