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COP26 and pension schemes

The 26th UN Climate Change Conference of the Parties (COP26) saw governments hand over their net zero emissions commitments to the corporate sector. At SEI, we have strong conviction in our investment stewardship program to effect long-term change. Stewardship is how investors use their voice as owners in a company to influence its sustainability practices and encourage long-term management of risks and opportunities.

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Carbon dioxide and other greenhouse gases have been increasing in the earth’s atmosphere due to mankind’s actions since the industrial movement began. Emissions have increased by 40% in the last 20 years alone.

Governments are beginning to ramp up efforts to reduce carbon emissions as climate impacts are increasingly felt world-wide. At the latest United Nations Conference of the Parties in Glasgow last year, governments built on previous commitments made in Paris in 2015. This year, hopefully, governments can make even more progress to mitigate climate change at COP 27 in Egypt.

These recent commitments made by governments could bring future greenhouse gas emissions closer to a long term net zero position. This is good news. Projected carbon emissions are moving in the right direction.

However, there is still further to go to get to a low carbon future. Everyone, including companies, has a responsibility.

One effective way to influence change in corporate behaviours is by the way pension schemes invest in companies, engage with their management and vote at their board meetings. Pension schemes may be able to wield influence because of the amount of capital they invest overall.

That’s why at SEI we have strong conviction in our investment stewardship program to effect long-term change. Stewardship is how investors use their voice as owners in a company to influence sustainability practices and encourage long-term management of risks and opportunities. Investment stewardship leverages investor influence with companies to promote positive environmental, social and governance strategy through engagement and proxy voting. At SEI, we believe in proactively engaging company leadership to foster collaboration and productive dialogue on priority issues.  

As we see more changes in company and government behaviours hopefully we’ll see greenhouse gas mitigation plans that bring the world closer to the goals of the 2015 Paris agreement.

 

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