UK investment consultant Redington to align all default client advice with net-zero

£500bn advisor to develop framework assessing ‘effectiveness’ of investment managers’ stewardship as part of seven-point climate plan

UK based investment consultant Redington, which advises on over £500bn (€574bn) of assets, has announced that from today its default client advice will be aligned with the goals of the Paris Agreement.

The bold new commitment to align its default advice with achieving net zero emissions by 2050 is one part of the independent consultant’s seven-point climate action plan, through which it seeks to “integrate sustainability across its entire business”.

Redington estimates that aligning its default advice with Paris will result in “most clients” achieving a 50% reduction in carbon emissions by 2030. 

Edwin Whitehead, Senior Vice President of Responsible Investment at Redington pointed to the developing “regulatory and legal environment” it is operating in as a UK company as a factor behind the move. “We just see the writing's on the wall, net zero is happening,” he said. "We’re in the transition decade, so we're transitioning our advice and we’re helping our clients to transition their investment portfolios.”

Last month, RI reported that Redington had responded to the UK Government’s Department for Work and Pensions (DWP) second consultation on plans for mandatory TCFD reporting, in which it argued that the UK regulator had “materially underestimated” the cost to pension schemes of establishing TCFD-aligned reporting.

Redington’s new climate plan will also see it develop a framework to assess the “effectiveness of the climate-related stewardship carried out by asset managers”, including scrutinising their voting record. Redington said that it will undertake “purposeful engagement” with investment managers itself to “encourage alignment with the Paris Agreement throughout the wider investment value chain”. 

Whitehead told RI that Redington sees its “position as a gatekeeper between asset owners and asset managers”, which entails a “a degree of responsibility”, he said, to “ensure that that we're playing our part in the investment value chain when it comes to sustainability”.

Other areas identified in Redington’s seven-point plan, include:

Objective Setting: helping clients articulate their own climate-related objectives

Climate Solutions: continuing to seek out attractive investment opportunities in climate solutions

Industry Frameworks: helping clients adopt, and actively engage with, appropriate industry-recognised framework 

Industry Collaboration: working with peers to create a Paris-aligned industry 

“This represents the biggest transition that we as a business have gone through since our founding, but something that we believe is vital in order to truly make an impact through our influential role in the broader value chain,” said Mitesh Sheth, Redington’s CEO. “As an adviser to over £500bn of client assets, allocated across 150+ asset managers, we recognise that we have a responsibility to use our influence as a force for good, creating positive change within the savings and investment industry.”