Towards More Effective Climate Policy Engagment: A Conversation on Practices, Prospects and Lessons from Australia and the UK
Last week Chronos Sustainability and the Church of England Pensions Board convened a private event in London for asset owners, asset managers, climate specialists and investor groups such as IIGCC and the PRI. Chronos’ Australia-based climate expert Dr Ian Woods, Laura Hillis, Managing Director of Responsible Investment at the Church of England Pension Board, and Chronos CEO Dr Rory Sullivan led a wide-ranging discussion on investor climate policy engagement.
Here are five takeaways from a lively discussion:
Different countries, different strengths: Investor engagement in both the UK and Australia has had some success, but in very different ways. In the UK a key achievement has been to fashion sustainable finance regulation that is ahead of the curve, with initiatives like the Transition Plan Taskforce, the Transition Finance Council and the introduction of mandatory TCFD reporting seen as world-leading. IIGCC, Influence Map and others have also done strong work convening investors around expectations on corporate lobbying. In Australia, investors have focused more on real economy policies. Strong collaboration has, for example, contributed to the recent decision to adopt an ambitious NDC, including a commitment to reduce greenhouse gas emissions by 62–70% by 2035.
Engage like it matters: A variety of good practice points were drawn out from previous investor engagement with policy makers including the strength of a collaborative approach, the need to properly resource this engagement, and the need to work with policy and public affairs specialists to understand government agendas and mechanisms. One cultural shift it was suggested where investors could improve however, was to bring more senior people to the discussion. “If you don’t deploy your CIO, CEO or senior decision maker, then don’t expect an audience with a Minister or senior policy maker. We have to engage like it matters”, suggested one audience member.
Improve messaging and communications: Progressive climate policy, that aligns with long-term investment goals, can underpin economic growth, and job creation. It can also mean cheaper energy and food bills. But investors are not being compelling or persistent enough in making these arguments.
A reset moment?: A lot has changed in the last year. Climate has become a more politicised issue in the UK and US, and pension consolidation in the UK has provided a potential reset moment for a stronger asset owner voice to emerge in this area in the UK. Australia has had both of these features - a politicised climate policy environment and a strong pensions industry - for over 20 years. One lesson from Australia has been that IGCC (the Investor Group on Climate Change, which has coordinated much of the investor engagement on climate change) has focused its messaging and engagement on the principles that should support policy design and engagement, This has allowed investors and policymakers to be flexible and to respond to changing circumstances when engaging with each other, while also providing a clear direction of travel.
We need longer than 90 minutes: This was a rare event where every single participant in the room spoke and over the duration of the event it was clear that there was an appetite for much more discussion, and action, in this area.
