United Church Funds recently took part in two significant events – the UN Climate Week as well as the PRI in Person Event. The latter, held in Paris over the course of three days, was an event to convene the signatories of the UN-sponsored Principles for Responsible Investment. United Church Funds has been a signatory of the PRI since 2007, and the meetings in Paris were productive and added to the public discourse on environmental, social and governance (ESG) investing.
The theme of the conference this year was “Responsible investment in an age of urgent transition” and focused heavily on a concept dubbed “The Inevitable Policy Response (IPR)” which aims to calculate the impact of a rapid and forceful policy response to climate change on 2,000 of the world’s largest companies.
The IPR may prove to be an important focus for companies, as it provides illustrations of how their emissions, products and raw resource inputs may be legislated, regulated and taxed when the world’s governments belatedly move to act on climate change. Relatedly, the IPR could become a useful tool for investors to evaluate their portfolios for those assets most likely to be whipsawed by a policy change that affects their businesses.
Similarly, the UN Climate Week demonstrated great concern for inaction on climate change by all sectors – in the public and private spheres. United Church Funds attended several sessions regarding investors’ responsibilities to act. Speakers encouraged investors to think differently about the “externalities” that may influence investing in the future by pricing in the environmental threats to business as usual when making investment decisions. Investors heard of new ways to invest in green infrastructure and solutions.
In addition, during climate week, a group of the world’s largest banks introduced the Principles for Responsible Banking, which are steps to increase the sustainability and positive impacts of the financial system aligned with the UN’s Paris Accord on Climate and the UN’s Sustainable Development Goals. These principles are broad in nature and will prove to be a framework through which engaged investors like United Church Funds can continue to discuss ethical behavior and action with the banks.
United Church Funds is heartened that the level of concern and the voices for climate change response are getting louder. The new concepts and frameworks that the PRI in Person and the UN Climate Week provided will arm us with the implements to continue to improve our own climate response and responsible investing platform.