UK Pensioners Commit to Determine Investments’ Impact on Climate Before Executing Deals

High-profile signatories across the UK pledge to find effective means to decarbonize their investment pipelines and portfolios.

Chief investment officers, trustees, and other participants of some of the UK’s largest pension funds are committing to prioritize climate change concerns for every investment decision they make moving forward, as part of networking website Mallowstreet’s Climate Charter.

The commitment maintains that each signatory on the charter will ask “what is the impact on the climate?” for every investment decision that is proposed, and “to demand that the carbon impact of every investment is measured and reported on by our managers.”

The charter also insists that investment professionals from these pension plans participate in shareholder activism movements by cooperating with corporate boards to disseminate a complete measurement of their carbon impact, and for each board to respectively draw out and execute a transparent business plan to transition to a low carbon future. Subsequently, each signatory pledges to review and divest from any asset manager who fails “to support and actively engage in stewarding the transition to a low carbon future.”

Notable signatories include Kevin Wade, CIO of the Supperannuation Arrangements of the University of London; Steve Catchpole, pensions investment director at the Aviva Staff Pension Scheme; Jim Haynes, director and chair for JP Morgan Chase Pension Plans; Ian McKinlay, CIO of Lloyds Banking Group Staff Pension Schemes; and Ron Schreur, CIO of the National Grid UK Pension Scheme.

While the signatures are not professionally binding, it’s a clear method to publicize the seriousness of the signatories’ intent to prioritize climate change concerns when making decisions related to portfolio management.

The charter was formed earlier this summer after a meeting of pension fund trustees determined that the emergency regarding climate change has become critical and needed immediate action.

According to NASA, humans have degraded the planet’s health so severely that even if all carbon emissions suddenly ceased, global warming would continue for at least several more decades, if not centuries. “That’s because it takes a while for the planet to respond, and because carbon dioxide lingers in the atmosphere for hundreds of years. There is a time lag between what we do and when we feel it.”

Dawid Konotey-Ahulu, director and co-Founder of Mallowstreet, explained “the investment community has the power to make a meaningful difference in the fight against climate change, and it needs to use this power now.”

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