28 February, 2017
ShareAction, the UK-based campaign group, and Boston Common Asset Management, the US SRI specialist, are working together on a shareholder engagement programme with banks in Europe and the US on climate change.
Speaking to Responsible Investor, Juliet Phillips, campaign manager at ShareAction, said it would be co-ordinating a transatlantic strategy for engagement with banks with US-based Boston Common during the upcoming AGM season that could involve co-ordinated statements and letters.
She added that while US investors had been active with engaging with banks on climate change over the past couple of years, not many European investors were currently taking action, and this would be a big focus for ShareAction, which already hosts the new European Responsible Investment Network, over the coming months.
It comes as ShareAction releases an investor report on the issue Banking on a Low Carbon Future. Speaking at the launch event for the report at the City of London Corporation in London, Phillips said there was a strong case for not just engaging with high-carbon industries on the issue of climate change:
“Investors can protect themselves from stranded assets but they remain exposed to macro high-carbon risks. Banks are uniquely placed to influence actors across the emissions chain. By financing high-carbon, banks can contribute to temperature rises. Engaging with banks could avoid portfolio-wide exposure to climate risk.”
The ShareAction report provides guidelines to inform investor engagement with banks including engaging on climate risk and management; and low carbon products and services.
Boston Common Asset Management, which has been coordinating investor engagement with banks on climate change since 2015, has endorsed the report.
In a recent report on its work, On Borrowed Time: Banks & Climate Change, it notes marked progress at many of the world’s largest global banks in addressing climate change, but says more needs to be done.
In the 2017 AGM season it urges investors to engage on a number of things including goals on reducing carbon intensive industries exposure and stress tests.
In 2015, Boston Common led a coalition of investors managing over $500bn in assets to assess the practices and long-term management of 45 global banks on climate-related risks.
Elsewhere, the Bank of England plans to focus on banking and climate change this year, according to Sarah Breeden, Executive Director of the Prudential Regulation Authority.
Breeden, who was speaking at the ShareAction launch report, said it would follow on from the Bank of England’s work on insurance and climate change.
Elaborating on this, Breeden said building on the work of the Taskforce for Climate-Related Financial Disclosures, the Bank of England would work on models with the private sector and think tanks to find out what exposure firms may have through lending. She added, “mapping the financial system with a climate lens is a big challenge for us”.