CA100+ members lukewarm on proposal to make lead engagers public

Only half of members polled approved of requiring disclosure of lead investors, with an opt-in approach proposed.

Signatories to Climate Action 100+ (CA100+) have given a lukewarm response to the initiative’s proposal to reveal its engagement leads and their target companies, with just half of respondents voting in favour.

CA100+ is the multi-trillion-dollar investor engagement initiative pushing for greater disclosure and transparency around management of climate risks at the world’s largest emitters.

The initiative is currently consulting members on its strategy for the next seven years and had proposed publishing a full list of the investors which are assigned to lead engagement efforts with each of its focus companies.

Aggregate results released on Thursday showed that half of the 170 respondents voted in favour of the motion, over 20 percent of the respondents opposed the idea, while a larger 29 percent were undecided.

The initiative said in response that it would be considering an opt-in approach to disclosure, although it declined to comment on how this would differ from the current approach where investors are able to publicly disclose their own engagements in stewardship and sustainability reporting.

Over 80 percent of the initiative’s lead investors filled out the survey.

The least controversial proposal was on updates to the CA100+ benchmark, subject to a separate consultation, which was approved by 94 percent of signatories.

Two other proposals, one focused on changing the initiative’s scope for target companies and the other on the creation of thematic engagement projects to allow investors that are not involved in company engagements to contribute, received a relatively low backing, with just 77 and 73 percent in favour, respectively.

Ben Pincombe, head of climate change stewardship at the PRI, noted a number of responses from investors had centred around better integrating the Just Transition into engagements, as well as calls for greater transparency around the initiative’s governance and the role that investors have on making strategic decisions.

Respondents also sought details regarding interactions with the philanthropic foundations that fund the initiative, and on other climate finance organisations that received the same funding.

A more detailed summary of consultation responses is set to be released in mid-December, the initiative itself is set to relaunch with its renewed strategy in the middle of 2023. The next progress update on the CA100+ benchmark, which tracks company progress against targets set by the initiative, will not be until September or October next year.

‘Focus on what’s important’

Initiative members shared their feedback and insights on CA100+ and stewardship more broadly as part of a panel discussion at PRI in Person on Friday morning. Francois Humbert, engagement lead manager at Generali Insurance Asset Management, said that investors should be focusing more on the quality of engagement than the quantity.

He called on investors to reduce the number of engagements they carry out and “really focus on what’s important to be able to spend more time on the value of these engagements”.

On collaborative engagement, Humbert said investor engagement groups need to institute better organisation. “If everyone is responsible for everything, nothing happens,” he said. “If in our groups we have someone for capex, someone for lobbying, someone for whatever, then we can get organised and be more efficient. It’s something we need to do.”

Kelly Christodoulou, senior ESG adviser for investments at AustralianSuper, said she understood the frustration around transparency. “There’s a lot of engagements that occur behind closed doors and it’s not transparent,” she said. “I think this is an area CA100+ can improve on in the next phase, and I sincerely hope we do it.”

Christodoulou also said that CA100+ should look to build out the skills and ability of its less advanced members. “CA100+ is a massive tent. There’s over 700 different investors within this tent, all with a variety of engagement experience, skills and abilities. In Phase 2, I’m hoping that CA100+ will be able to build capacity for all of us to be involved in quality engagements.”