The global financial community
We have less than ten years to transform the global economy if we have any chance of addressing the environmental and social emergencies we face. The global financial system has an invaluable role to play to mitigate and avoid these crises - by significantly and rapidly increasing the volume of finance directed towards activities aligned with achieving a 1.5°C future and the Sustainable Development Goals (SDGs).
To do this, we must ensure the people in charge of financing and investment across the global economy integrate environmental, social and governance (ESG) considerations into all aspects of financing and investment decision making. A4S uses its networks, convening power and technical credibility to inspire, transform and scale up efforts by capital market leaders to remove barriers, create steps to accelerate change and enhance technical capability to integrate ESG into financial decision making.
Current A4S focus
Pension Scheme Trustees
Mobilizing action from pension scheme trustees to embed sustainability considerations into their investment and strategic decision-making processes.
The issue to address: Pension scheme investments carry extensive, diverse and complex exposure to climate, nature and people outcomes. Whether related to physical, transition or litigation risks resulting from climate change or other related issues, these may result in significant business disruption, ‘stranded assets’ and a resultant devaluation of the investment.
Factoring climate change, nature and people into investment and strategic decisions is seen as a fundamental part of the response to these risks. It is therefore prudent for trustees to consider a range of responses, including steering their scheme investment and funding strategies – as well as their stewardship activities – towards, for example, net zero alignment, protecting savers’ money from the potential economic shocks of climate change and other related issues, and leveraging investment opportunities created by the global transition to a net zero economy. Additionally, it is important to find ways to increase awareness of the risks presented by the collapse in ecosystems and biodiversity and well as a better integration of people-related risks.
A4S focus: One of the key barriers to the above is a lack of knowledge, confidence and the skills necessary to progress. A4S is seeking to help overcome this by equipping key stakeholders in the pensions and retirement industry with the knowledge, confidence and know-how necessary. Ways in which we do this is through:
A4S ASSET OWNERS NETWORK
We provide a confidential space for chairs of pension schemes of all types to share and learn with peers on embedding key sustainability considerations into their strategic and investment decision-making processes.
SHAPING WHAT GOOD LOOKS LIKE
Our ESG Toolkit for Pension Chairs and Trustees includes guidance, case studies and an ESG Maturity Map to support chairs and trustees of pension schemes identify the practical steps to embedding sustainability considerations into their investment decisions, reporting, and engagement across the investment chain.
We also run webinars and roundtable sessions bringing different parts of the pension and wider finance community together to address specific challenges. See more on our events page.
COLLABORATING WITH THE WIDER PENSION COMMUNITY
We recognize the power of collaboration and the inefficiency of duplication, and therefore work with key groups within the pension community to maximise impact.
This has included joint events and webinars with trade bodies and associations. We are also a formal:
Bank CFOs and finance teams
Mobilizing bank CFOs and their finance teams to support their organization address climate, nature and people-related issues.
The issues to address: The global banking sector plays a critical role in ensuring an effective response to the challenges of climate, nature and people. While many banks grapple with the challenges of delivering on net zero targets, others are yet to set a net zero goal, while significant financing on a global scale is still going towards activities inconsistent with limiting global heating to 1.5°C. Further, the adoption of goals and integration of approaches to address the ‘nature’ and ‘people’ challenges are very limited.
Bank CFOs, with their finance teams, can be a force for change from within, influencing the direction of a bank’s strategy and adoption of sustainability-related goals, as well as the delivery and measurement of progress to achieving those goals. While numerous initiatives and networks exist for the banking community, with a growing range of resources for banks on addressing climate challenges specifically, there is limited guidance for CFOS of banks and their finance teams on the practical steps to operationalizing net zero commitments, as well as addressing wider SDGs.
A4S focus: We create an enabling environment for CFOs and banks and their finance teams to equip them with the tools and knowledge necessary to support their bank address the sustainability challenges. Facilitating a peer network as a neutral entity provides them with a trusted space to share and learn from their peers. Our work includes:
In addition to our pan-sector CFO guidance, we have produced guidance specific for the banking sector.
This has included:
- Our Net Zero Guide for Banks which outlines the net zero landscape, the business case for action and the practical steps to take to support their organization's progress towards net zero emissions.
- A series of technical webinars on the practical steps finance teams can take to support the financed emissions accounting process. Find our latest financed emissions webinar here.