Asset owners raise concerns about climate change efforts
Climate concerns were a top issue when global asset owners and investors gathered in Tokyo for one of the world's largest conference on responsible investment, the United Nations’ Principles for Responsible Investment (PRI) in Person 2023.
The theme of this years’ conference, which ran from October 3 to 5, was ‘Moving from Commitments to Action’, which essentially shift the focus from just frameworks and policy towards more practical, concrete action needed to achieve real world impact.
Few places show more need for responsible action than ESG-related investments. According to one delagate, Ann-Louise Winther, senior ESG manager at Denmark’s Industriens Pension, the most important takeaway was about the serious consequences if the world failed to limit global warming to 1.5 degrees.
“The scientific participants were very clear on this, and they emphasized that we are in a true run against time if we want to be aligned with the commitments given in the Paris agreement. The challenge becomes even bigger due to the geopolitical situation as well as the pushback on responsible investment in for example the US,” Winther told AsianInvestor.
Still, the conference did leave some hope, as many of the participating investors try to navigate efficiently this challenging environment and push through active ownership for more ambitious transition plans across the companies that they invest in, she elaborated.
ASIA STRUGGLES
Beyond climate change, some of the big themes covered at PRI in Person were around natural capital and biodiversity, and the ongoing need for supportive policy.
These were all covered by the panel sessions, but as is often the case, the side discussions held during networking events offered key insights into what is top-of-mind for investors, according to Danielle Welsh-Rose, head of sustainability investment specialists and Asia-Pacific sustainability at abrdn.
“These discussions highlighted the struggle that many Asian-based investors are having around resourcing of ESG roles, and training and development of existing investment teams. The search for quality scenario analysis that can be translated into investment decision making was a hot topic, as was the debate over how realistic the new IPR climate forecasts are,” Welsh-Rose told AsianInvestor.
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The increasing burden of ESG-related regulation across the world was a regular feature of the side conversations at PRI in Tokyo. How regulation impacts the effectiveness and innovation of ESG teams was also discussed. Another hot topic was the tackling rising production and consumption activity in emerging Asian economies.
“A large share of the world’s emissions happens in Asia. Among asset owners, a major topic was how investors work on active ownership the best way in this region to secure progress in the transition,” Winther said.
THE PLACE TO BE
With a total portfolio valued at DKK219 billion ($31 billion) as of September 30, 2023, Industriens Pension administrates the labour market pension scheme for the employees under the Collective Bargaining Agreement for Industrial Employees.
The Danish labour market pension scheme is a compulsory scheme. Industriens Pension has currently around 400,000 members in approximately 8,000 companies.
Winther considers PRI in Person as the largest conference on responsible investment in the world where Industriens Pension gets valuable insight into the development of responsible investment across the globe. Thus, she made the journey from Northern Europe to Tokyo to particpate.
“We prioritise these kinds of events both from a cost and climate perspective, and the PRI in Person conference, we have chosen to prioritise due to the relevance of the topics being discussed and the participation from investors from so many countries around the world,” she said.
Winther pointed out that the investment community needs to coordinate globally on issues of both climate change and human rights, in order to create meaningful change.
“Being a global investor, we need to know what the trends of responsible investments are from west to east. Of course, we also get that during our daily contact with our external managers, but a conference like this gathers all the different views and approaches and that’s what makes it so valuable,” Winther said.