The UK’s Local Authority Pension Fund Forum (LAPFF) and PGGM in the Netherlands are among six founding members of a new platform aimed at accelerating the shift towards achieving international climate goals via “a step change” in engagement with Asian banks and energy companies.
Aviva Investors, BMO Global Asset Management, Fidelity International and Legal & General Investment Management are the other founding members of what has been dubbed the Asia Transition Platform.
The platform will be coordinated by Singapore-based engagement specialists Asia Research & Engagement.
“Accelerating energy transition in Asia is critical to addressing the climate crisis, yet there is a gap between global investors who want to drive change, and the companies in Asia vital to making it happen,” said Ben McCarron, founder and managing director of Asia Research & Engagement. “The Asia Transition Platform aims to bridge this gap.”
According to an announcement about the platform, in the first three years participating investors are to engage with at least 50 Asian companies across all of the continent’s leading financial markets, with an initial focus on carbon risk and coal at financial institutions and coal-exposed companies, including those in China such as Huaneng and Huadian.
“There is a huge opportunity for Asian companies to take the lead in tackling the climate emergency,” said Mirza Baig, global head of ESG research and governance at Aviva Investors. “This platform brings together investors dedicating to achieving the breakthroughs required to do so.”
“We are critically aware that climate change is an issue that needs to be addressed globally”
Andres van der Linden, responsible investment adviser at PGGM
Action that investors on the platform could seek to promote includes Asian banks committing to stop financing fossil fuel expansion and related infrastructure, and Asian power utilities setting out plans to bring their businesses in line with Paris Agreement targets.
Another stated aim of the platform is to communicate investor concerns about high carbon energy sources to Asia’s fossil fuel users and producers, financial institutions, financial regulators, and energy regulators.
“In major developed equity capital markets there are a number of groups and initiatives that investors participate in when engaging with companies to drive change,” said Doug McMurdo, chair of LAPFF. “However, in Asia there are far fewer such opportunities, particularly when it comes to financial institutions and power companies in China.
“The Asia Transition Platform gives a needed new impetus to global investor engagement with those Asian companies that are pivotal to energy transition.”
At PGGM, meanwhile, responsible investment adviser Andres van der Linden said that although the organisation was a Dutch pension fund manager, “we are critically aware that climate change is an issue that needs to be addressed globally”.
“By participating in the Asia Transition Platform, we aim to encourage Asian companies to participate in the energy transition in a way that is both meaningful and appropriate,” he said.