We’re proud to publish our inaugural Engagement Report for 2021 to 2022. The report is a record of the engagement campaigns P1 Investment Management have been working on over the last year and a breakdown of our activity across the months that support this array of campaigns. The report covers the work we do across our ethical and sustainable services, from engaging fund managers on behalf of investors in our Ethical and Sustainable Model Portfolios to direct AGM voting as part of the TM P1 Sustainable World Fund.
We believe that engagement is a crucial tool for investment to bring about positive change in society. But, engagement should not only be words, it must be followed with action as this will empower engagement as a viable means of steering change. Whether voting in AGMs or engaging fund managers to invest better and be better, we continue to act. Where responses have been unsatisfactory, we have taken decisive action and removed investments from our panel.
Campaigns this year have included:
- Net-Zero Initiative – driving companies to be net-zero by 2030.
- Hydrogen as a Clean Fuel – or not as the case can often be.
- FRC 2020 UK Stewardship – to strengthen governance.
- Plastic Waste – driving companies to reduce their plastic waste.
- and many others.
In addition to these investor initiatives, we’ve continued to push our Net Zero Carbon Target initiative as a tool for pushing investors and companies towards net-zero emissions by 2030. By the end of our reporting period, the target had over £14bn AUM across 16 funds and 10 fund houses. The target is progressive having started with NZC10 (Requiring 10% of the portfolio to meet requirements) it has developed NZC20 (20% with more stringent auditing and requirements) and is on the cusp of announcing NZC30 for those funds meeting the conditions.
P1’s Head of Ethical & Sustainable Investment, Dr Quintin Rayer said:
“This year has seen engagement quality rise in prominence for investors. With action from organisations like ShareAction and As You Sow, companies and investors have been challenged to justify their actions or inaction. On top of this, we’ve seen active and passive asset managers scrutinised over engagement. Some large asset management firms have been criticised for a lack of meaningful action when using their voting power to drive positive social and environmental causes. Where asset managers have acted, we’re seeing emphasis on greater transparency and action. For example, managers who, like P1, have fossil divested in response to inadequate action on emissions.
At P1 our engagement focus remains on climate related issues. Given the urgency of the climate crisis and damaging human-induced global warming, we clearly identify climate change as a thematic engagement priority.
However, our engagement also covers social and governance issues that do not have direct links to climate change. We recognise that many social issues are created by climate change. We act quickly on emerging issues on behalf on our investors. For example, questioning funds on Russian and Belarusian investments following the invasion of Ukraine to ensuring climate friendly funds are wary of the opaqueness of investing in hydrogen, which can make hydrogen essentially another fossil fuel.
We continue to see engagement, and products like this engagement report, as a key part of our role as ethical investors and a fundamental responsibility imbued on us by investors using our services.”