As part of this episode, we talk to three young people who are passionate about the environment and we discuss the future with Chandra Gopinathan, a Senior Investment Manager, Sustainable Ownership at Railpen and David Hunter, CIO at Renewity. 

We explore the topic of social impact during the energy transition as the mix of energy generation changes over the next few years, which will have an impact on many sectors. We also look at how we get to a ‘just transition’ – and how do industries get to a ‘just transition’? 

Perfect can’t be the enemy of good – and our debate explores why the transition needs to be balanced and flexible to move in a fair and just manner. Recent events between Russian and Ukraine have also placed energy in the spotlight, especially the impact on affordability and energy security – we explore what does this mean going forwards? 

We spend time looking at unpacking renewables and looking at both opportunities and challenges.  When then pivot to natural capital and look at what the Task Force for Natural Capital reporting standards mean. 

We close by looking at emerging technologies.

In this episode of The Climate Change Briefing, we explore the important role of stewardship, which encompasses engagement, voting and escalation tactics, such as asking questions at a company annual general meeting. As climate risk becomes more well-understood, stewardship is going to be an important governance tool for pension schemes and trustees. 

Pat Sharman of CACEIS is joined by Caroline Escott, Senior Investment Manager – Active Ownership at Railpen, David Kneale, Head of UK Equities at Mirabaud Asset Management and Janice Turner, Co-Chair of the Association of Member Nominated Trustees, who were behind Red Lines Voting. 

We begin by unpacking what good looks like in stewardship, breaking it down into three key areas - material, meaningful and measurable. We explore why asset managers should explain how assets have been managed in alignment with clients’ climate policies and why it’s important that portfolio managers and pension scheme trustees must be aligned when it comes to climate objectives.   

We tackle voting, and ask ‘why should pension schemes set their own voting policies’? We then delve into the important initiative called Red Lines Voting, which is designed to provide a framework for pension schemes and trustees on voting around ESG and climate issues. 

And should trustees engage or disinvest? This is a key question that crops up time and time again when pension schemes and trustees set their ESG and climate policies. We provide some key pointers. 

We end the podcast by looking at the concept of flying blind. This is when companies don’t reflect the material risks of climate change in their annual report and accounts.  

There’s no doubt that stewardship should form an important part of a climate strategy that pension schemes and trustees set themselves and we hope this podcast can shed some light on the most important concepts of stewardship. 

In this episode, we look at climate scenario analysis, alongside the levers that pension schemes and trustees can look at to assess and manage their climate risks. Pat Sharman of CACEIS is joined by David Kneale, Head of UK Equities at Mirabaud Asset Management and Katharina Lindmeier, Senior Responsible Investment Manager at Nest. Katharina was responsible for writing the climate change policy at Nest.

We begin the podcast by unpacking advice for pension schemes and trustees on where to start in assessing and managing climate risk. We look at the concept of exclusions and engagement with higher emitting sectors and why greater transparency of voting intentions by asset managers is key. 

Scenario analysis is another key topic of discussion. Here, we uncover some of the complexity in understanding climate modelling, and look at the importance of regional and local impacts of climate on companies. We provide some tips on how pension schemes and trustees might integrate scenario analysis into their climate policies. 

Biodiversity is a key topic of discussion, where we need to think about nature in the context of climate change, and in its own right. This brings the podcast onto the topic of nature related disclosures and the Taskeforce on Nature-Related Financial Disclosures, where we unpack how these risks might be assessed.  

In this episode, we focus on the importance of robust data and the information it can provide to help pension schemes understand climate risk. Joining Pat Sharman of CACEIS is David Hunter, Co-Founder and CIO of renewables specialist Renewity, Chandra Gopinathan, Senior Investment Manager at Railpen and Scott Foster, Head of Digital & Governance Solutions, UK, at CACEIS. 

Getting access to data is a critical step for pension schemes and trustees so they can understand how their scheme’s investments are exposed to climate risks. ESG and climate risk are quickly becoming traditional risk factors, alongside financial risk, and assessing this requires high volumes of data. 

We also outline some of the headwinds posed by lack of consistency in the data that’s provided across the different data vendors that supply ESG and Climate data but acknowledge that despite this, we need to be taking action now. We discuss why  lack of consistency can be beneficial.

Finally our guests provide a case study in how a small DC-based trust scheme has approached the process of collecting and interpreting data on their ESG and climate risks and how this led to more positive outcomes in the engagement with their asset manager.

In this second episode, we look at important themes such as ‘net-zero. Joining Pat Sharman of CACEIS is Jessica Fries, who is the Executive Chair of Accounting for Sustainability, which was established by Prince Charles, the Prince of Wales, and Chandra Gopinathan, Senior Investment Manager at Railpen.

The more greenhouse gas emissions we push into the atmosphere, the greater the impact on temperature increases and global warming. Getting to net zero and beyond, to negative emissions, is important to stablise the climate. There was a real focus on net zero at COP26, the United Nations climate conference held in Glasgow in 2021. And in the build-up to COP26, many companies and pension schemes announced their net-zero commitments. 

Through this podcast, we unpack what net zero means and summarise some of the best practice concepts for pension schemes.

We look at the topic of disinvestment from higher emitting sectors or companies, which is a key discussion area for pension schemes and trustees, and outline why engagement is key.

Nature based solutions have also been growing, to help reduce carbon emissions. However, we explore why solutions such as carbon offset don’t work that effectively and why therefore, it’s important for pension schemes to focus on accelerating to absolute emissions reductions. 

How should pension schemes start on their journey to climate risk governance? We walk through some of the steps that pension schemes and trustees can take in establishing their governance framework and getting their hands on good quality data to assess their scheme’s total carbon emissions exposure from its investments.

And what are the key gaps? We delve into the importance of accounting standards to drive more transparency and disclosure. 

Finally, engagement with asset managers is also a key area of discussion. We cover concepts such as the coverage that asset managers have on the emissions impact across each company’s supply chain. 

 

How we adjust to the new realities of climate change is the central story in episode one of the Climate Change Briefing.  Pat Sharman of CACEIS brings together Professor Lorraine Whitmarsh, Director for Climate Change and Social Transformation at the University of Bath and Chandra Gopinathan, a senior investment manager with Railpen, one of the largest and longest established pension funds in the UK.

We know that climate change is evolving rapidly. In recent years, the effect of climate change has made itself felt around the world with increasing frequency. However, this has not been enough to change our individual behaviours. The scale of the climate change challenge facing us as individuals can be overwhelming and previously, this has impeded our ability to take action.

Times are changing. At an individual level, public behaviour has now started to respond to the threat of climate change. In this episode, we explore how education and information has a role to play to help inform individuals on what are good choices and we look deeper at why information itself is not usually an effective means of driving change. We highlight other measures that can drive more success in changing behaviours.

We talk about the importance of climate education, linking the science to the day-to-day decisions that individuals have to make. And we tackle some important questions - are voluntary behaviour changes enough or do we need more regulation and government intervention? Should there be a carbon tax? And is climate change still a low priority when it comes to decision-making on the purchases that individuals make?

This idea of constantly being able to produce more things and that the resources are endless is something that is an impossibility. Tackling carbon emissions in fast moving fashion, for example, is a complex one – we outline some of the challenges and why social considerations of change also need to be considered.

Our contributors end the episode with their final thoughts on the way forward.

Pat Sharman of CACEIS looks at the impact of climate change on pension schemes, investments and finance.