Climate, Biodiversity & Nature: Facilitating client engagement
Climate physical risk and biodiversity are key topics for our clients. At their request we have developed and implemented a new engagement programme, with Chronos Sustainability. This is designed to support clients in upskilling their teams, to directly engage with their holdings, and participate in every stage of the engagement process, from company selection, prioritisation, to contact with the companies.
Climate impacts are a risk to our portfolio. While more companies have begun to articulate their strategy and progress on climate mitigation, further clarity is needed on the approach to climate adaptation and the use of biodiversity conservation to enhance climate resilience.
For this engagement, we have focused on consumer staples as a sector that is particularly at risk (directly and through the value chain) and considered factors such as: scale of direct exposure to climate of direct exposure to climate hazards, potential to exert influence on assets at risk from climate impacts and geography for company selection.
Companies being engaged are listed in the appendix.
Our objectives of the programme are to:
- Identify the risks to consumer staples companies associated with physical climate risk and encourage them to assess and manage the risk and adapt effectively to climate impacts
- Understand how companies are impacting biodiversity and managing biodiversity to mitigate climate impacts, including identifying and managing potential maladaptations, conflicts and trades offs
- To build client capacity on stewardship and providing an opportunity for clients to be involved in engagement
This programme of activity, due to run until at least 2026, started in the summer of 2023 with the establishment of the client group and identification of target companies. Baseline research, supported by Chronos was undertaken throughout the rest of 2023.
2024 will see letters inviting companies for dialogue sent out, and ensuing engagement kick off. We will continue to report on this ongoing programme for the next couple of years.
