Asset owner declaration

Amongst the many commitments being made following COP26, how can asset owners, journalists, civil society and politicians know what is good practice in investment and what is green washing? Increasingly asset managers are claiming to support the Paris Agreement and its objective but there is a huge variance in policy and practice.

One of the founding partners of Snowball, Colin Baines, Investment Manager at Friends Provident Foundation collaborated on a joint action by Students Organising for Sustainability UK (SOS-UK), Friends Provident Foundation, and ShareAction's Charities Responsible Investment Network and Responsible Investment Network - Universities to issue an asset owner declaration on the minimum standards they expect from their asset managers. Colin commented: “The variance in standards from asset managers making similar climate commitments and claims is huge. As asset owners, we wish to send a strong market signal and draw a line on greenwashing by establishing a baseline to judge them against. For example, we expect managers that claim to support the Paris climate agreement or net zero targets to vote in favour of aligned shareholder resolutions. It is incredulous that so many managers vote against their stated climate objectives, often more than they vote for them."

The declaration covers strategy, asset allocation, active ownership and transparency including the following minimum standards.

• Asset managers should adopt an investment strategy covering all assets under management to achieve net zero emissions by at least 2050.
• Asset managers should exclude coal and tar sands, at a minimum, and actively seek investments in solutions to climate change.
• Asset managers should have a default position to vote in favour of all climate resolutions bought by shareholders at company AGMs and provide an explanation for any votes against.
• Asset managers should engage in active shareholder engagement on 1.5°C aligned transition plans, with short and medium term science aligned targets; and implement robust engagement escalation policies, including votes against directors and co-filing shareholder resolutions.
• Asset managers should regularly disclose all investment holdings, voting records and engagement activities.

Organisations with over £7 billion in assets under management have signed the declaration since COP26, and it remains open to sign.

Snowball investor, The EIRIS Foundation, are one of the early signatories of the declaration: "We, the undersigned asset owners, support the objective of the Paris Agreement to keep global warming well below 2°C and preferably 1.5°C – the level considered ‘safe’ by the Intergovernmental Panel on Climate C

hange (IPCC), and call on the asset management industry to adopt minimum standards in support of that objective."

To sign the declaration, please complete the form here. Signatories of this declaration must be asset owners who use external asset managers. If you have any queries, please get in touch with melanie.kee@sos-uk.org.