Brunel Pension Partnership teamed with consultancy Chronos Sustainability to develop a climate change framework that would allow it to achieve investment returns whilst being in alignment with the goals of the Paris Climate Agreement.
This partnership led to Brunel's five-point plan to build a zero-carbon future policy:
· Policy – Encourage policy makers to establish comprehensive and robust climate change policy frameworks.
· Products – Increase Brunel's number and range of products that deliver substantial climate change benefits.
· Portfolios – Ensure investment portfolios are resilient under a range of climate change scenarios.
· Positive impact – Enable investments in activities that directly support the low-carbon transition.
· Persuasion – Challenge and encourage companies and other entities to support the transition to the low-carbon economy.
Launched in January this year, Brunel Partnership has taken the principles and developed practical applications that it will implement by 2022. This includes demanding its holdings take steps to align their emissions with the Paris Agreement, with those that fail to do so facing votes against board members or divestment.
The firm will also challenge its investment managers to demonstrate a reduced exposure to climate risk. Managers that fail to push companies to align themselves with the Paris Agreement will face the threat of their mandates being removed.
"This project is the product of a shared determination to put meaningful steps in place to enable the reinvention and redefinition of investor responsibility for climate change," said Rory Sullivan, CEO of Chronos Sustainability. "The resulting Brunel Climate Change Policy defines those steps and shows the importance of analysing climate change as a systems issue – where individual investors see themselves as actors in a wider investment system and commit themselves to focusing their efforts on the areas where they have the greatest influence and impact."
Brunel also notes how its appointment of BlackRock to deliver bespoke investment risk management services to its clients has seen a change in its commitment to climate change and sustainability.
Sarah Melvin, head of BlackRock's UK business acknowledged Brunel's impact in its change of outlook.
"We greatly value the active engagement and thought leadership from the Brunel investment team... Sustainability is the new standard for investing at BlackRock and we look forward to our ongoing partnership with Brunel and leading further change across the industry," she said. EF