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The Future of Investor Engagement

The UN-Convened Net-Zero Asset Owner Alliance releases a high-level paper outlining a forward-looking, systematic stewardship approach for investors that seeks to mitigate the existential risk of climate change. This stewardship approach focuses on how investors can leverage multiple tools of engagement to support changes to economic realities that align with a transition to a 1.5C future.

Key points

This discussion paper draws attention to key engagement approaches which, when deployed in complement with corporate engagement, can catalyse systemic decarbonisation of the real economy and proposes three key areas where climate-ambitious investors must expand and increase their stewardship and engagement efforts:

  • Sector/value chain engagement, whereby investors can leverage insights from corporate engagement to support solutions across industries and sectors, and identify systemic or regulatory hurdles obstructing decarbonisation, particularly in hard-to-abate sectors;
  • Policy engagement directly follows, where investors lend their voice, alongside other stakeholders, in calling on policymakers to address the economic, technological, and regulatory hurdles preventing decarbonisation at sufficient speed;
  • Asset manager engagement complements all other engagement streams, ensuring that asset managers’ activities in stewardship align with asset owners’ long-term interest in a transition to net-zero.