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IA updates Climate Change Position and Action Plan

In 2020 – 12 months ahead of the UK hosting COP26 – the IA published an industry position on climate change. This paper had two main goals – one, to publicly recognise climate change as one of the single biggest systemic risks facing society and planet today and two, to serve as a blueprint for our industry’s commitment to specific action, including working with UK government, businesses and our members to accelerate change.   

Much has changed since then – we experienced a global pandemic that continues to reshape public attitudes, business and social interactions on unprecedented scale; the 2020 US Presidential election saw Joe Biden win and with it, a shift in climate diplomacy with the US re-joining the Paris Agreement; most recently, we have witnessed the devasting effects of the Russian invasion of Ukraine, including the global impact on energy security and the cost of living. We yet again find ourselves at a critical juncture on the journey to honour the UK commitment to bring about net zero greenhouse gas emissions by 2050 (“Net Zero”) and to display global leadership and galvanise other countries to do the same.  

However, one thing that has not changed is our industry’s commitment to climate action. This year, between COP26 and COP27, we have updated our position and action plan in line with the progress our industry has made in terms of its 2020 commitments as well as to reflect changes in the public policy world. In line with the announcements made at COP26 in November, our updated Climate Change Action Plan summarises our commitments to climate action across six key areas:

  • investors as stewards,
  • empowering consumers to make informed decisions,
  • sharing knowledge and expertise,
  • the path to net zero,
  • data and
  • talent.

We outline our commitments to supporting the pursuit of the UK’s net zero target. This includes ensuring climate-related financial risks are part of investment processes, embedding investee company transition plans and making use of our rights and responsibilities as stewards of our clients’ assets to support and challenge the companies in which we invest as they make the transition.

We will also help to improve transparency on the sustainability credentials of investment products to empower consumers to make more informed decisions about their own sustainable investments. We will do this by supporting the development of best practice, sharing knowledge and expertise and helping the government create sustainable opportunities.

Our action plan and commitments will be reviewed on a yearly basis to ensure we are maintaining pace to support the UK economy’s transition to net zero by 2050 and keeping abreast of the latest regulatory and policy changes.

The action plan is the latest expression of the steps the IA is taking to deliver on the IA’s position on climate change, which outlines our support for the Net Zero Asset Managers initiative (NZAM), of which we became the first official supporting partner organisation in July 2021. Our updated position builds significantly on our 2020 paper and now recognises the importance of nature in preventing climate change, as well as the harmful effects climate change is having on the conservation of biological diversity. We fully support the objectives of the UN Convention on Biological Diversity.

We can only make the transition to a net zero economy if we all play our part, and over the coming years, we look forward to working closely with the UK Government, regulatory bodies and our member firms to achieve meaningful change and support the UK in becoming the world’s first net zero aligned financial centre.

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