A new company, Universal Owner, has been established to measure the efficacy of climate change-focussed engagement by investors.
The start-up is the creation of Thomas O’Neill, who co-founded InfluenceMap, an NGO that also challenges investors and investor groups on the credibility and robustness of their pledges and actions.
O’Neill said he left InfluenceMap “to focus on the concept of impact and helping institutional investors achieve it through their engagements”.
Universal Owner is aiming to formally launch in February with publication of a report critiquing engagement by asset managers.
According to its website, Universal Owner’s overall goal is to “correct a flaw in the market” whereby “investors and civil society care deeply about engaging successfully with their investee companies, but we have no clear theory about how to measure the efficacy of an environmental engagement”.
In comments shared with IPE, O’Neill said institutional investors rarely disclosed the vast majority of their engagement activities, “and it is rarer still for them to rigorously assess the impact of their engagement”.
Legal & General Impact Management’s Impact Pledge and Hermes EOS’s self-reporting were exceptions to the norm, O’Neill said.
According to O’Neill, Universal Owner has developed a new methodology to assess the impact of investor engagements, to score if and how far they move companies towards alignment with the objectives of the Paris Agreement.
“Attending, objectively, to how investors can have the most engagement impact, will be essential if the financial sector is to play the role it can and should,” said O’Neill.
The report scheduled for release this month will reveal the results of an analysis of investor engagements with 15 leading utility companies over the last five years.
“We discovered a considerable variance in the impact of different demands and tactics,” he said.