An Asset Manager's Perspective on the Transition Pathway Initiative


Helena Vines Fiestas
Head of Sustainability Research at BNP Paribas Investment Partners

The Transition Pathway Initiative is a game-changing initiative for three reasons. First, it provides a robust, independent and academically rigorous framework for assessing how companies are managing the greenhouse gas emissions associated with their businesses, as well as how their strategies and targets align with the international target of maintaining a global temperature rise of below 2 degrees above pre-industrials levels.  Critically, the methodology does not reinvent the wheel but builds on leading initiatives such as the investor expectation guidelines of the Institutional Investors Group on Climate Change (‘IIGCC’), to which we have been contributing since its inception.

Second, it covers a large universe of companies: over 100 will be assessed in 2017 and many more in 2018, with all of the results and analysis being made publicly available. The value of the extensive coverage and of making this information available to all cannot be underestimated. Even major asset managers such as ourselves struggle to analyse in such detail such a large number of companies’ climate strategies. With all of the analysis and data collection already done for us, we invest our resources in engaging with the companies to encourage improvement in those areas identified as weaker.

Third, it is backed by and led by asset owners. Asset owners, despite their key role in the investment chain, have often been silent on climate change. This initiative changes that; it is a clear expression of what asset owners expect from companies and from their investment managers. This will cascade through the investment chain. It will certainly drive asset manager action. It will mean that companies are getting a clear and consistent message from all investors. It will enable us to better align our engagement with the needs and interests of our clients. And it will signal to policymakers that long-term fiduciary investors recognise and accept the risks presented by climate change, and the importance – to these investors and to wider society – of taking action.