Supporting a sustainable Covid-19 recovery through ESG engagement

Discover our 2021 ESG engagement priorities – for supporting a sustainable Covid-19 recovery.
February 2021

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Risk warnings

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

We have set out our three engagement priorities for 2021, focused on supporting a sustainable recovery from the global pandemic and the 2030 target date for achievement of the UN Sustainable Development Goals (SDGs).

In the year ahead, we’re pledging to continue to prioritise our engagement around:

  • Climate change – driving action towards a net zero emissions global economy
  • Biodiversity
  • Inequality & social justice

The race to net zero

In a continuation of our 2020 commitment, we remain focused on climate change. This year, we will push for the adoption of targets consistent with net zero emissions globally by 2050, and for robust strategies to implement these. We’ll also continue to focus on financial institutions, pressing for climate change to be fully integrated into lending and investment policies, and for the adoption of net zero aligned strategies – as we ourselves have adopted, as a founding member of the Net Zero Asset Managers Alliance. We’ll also add a new sector to our engagement, engaging with the real estate sector on energy-efficient buildings.

Risk warnings

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Use our handy glossary to look up any technical terms you are unfamiliar with.

Quote line

2021, with the rescheduled COP26 climate negotiations, offers a real opportunity to close the gap between the current trajectory of greenhouse gas emissions and the radical cuts needed to keep on track to limit the global temperature rise to 1.5 degrees Celsius. Action by financial institutions and corporates will be critical, with the UN’s Race to Zero Campaign serving as a central reference point. We will increasingly be holding companies to account on the detail underpinning their climate pledges, to ensure commitments will contribute to meaningful change.

Vicki Bakhshi, Director, Responsible Investment Analyst

Addressing biodiversity loss

The current scale of biodiversity loss globally poses an existential threat to the ecosystems that support global economic and social wellbeing. In 2021, we’ll seek to drive positive biodiversity outcomes, through a continued and expanded engagement programme with companies to curb deforestation, manage soil and freshwater resources and address ocean pollution. Engagement will focus on the most critical sectors to reducing negative biodiversity outcomes, including the food and beverage, transport, extractives and financial sectors.

Supporting social justice and reducing inequality

We have a long-standing and successful history of engaging on issues from the living wage, gender diversity and access to healthcare. This year we’ll continue to engage on these topics, whilst developing our efforts to encourage companies to improve management of racial and ethnic diversity, contribute to a just transition in response to climate change, and tackle emerging issues in human rights in industries like IT, power generation and metals & mining. We’ll focus in particular on human rights issues inherent in the energy transition, including longstanding challenges in the fossil fuel extractives chain and new issues arising in the renewable energy sector.

The economic turmoil and social upheaval from the pandemic has put long-term sustainable challenges at the heart of the global agenda. Heightened public consciousness of social inequality, climate change and loss of biodiversity are putting pressure on global leaders to adopt immediate, integrated action. As investors, we have a central role to play in driving this action, through the responsible allocation of capital and engagement with companies to encourage positive change. Engagement with a wider pool of stakeholders alongside company dialogue is crucial to success, and to meet the 2030 SDG targets. A unified voice, across business, charities, governments and increasingly the public is our most powerful tool as we pursue a sustainable recovery, the Sustainable Development Goals and ultimately a sustainable world.

Claudia Wearmouth, Managing Director, Co-Head, Responsible Investment

Use our handy glossary to look up any technical terms you are unfamiliar with.

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