Eastspring Investments: Responsible Investment Report 2022
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Insights
Taking on climate change and decarbonisation as the first thematic engagement of the Central Engagement programme provided great insight to the team on how to approach future thematic engagements. We recognised that for a topic as complex as climate change, we needed to be cognisant of local and industry sensitivities and adjust our course of engagement to allow for clear, two-way communication with these companies. As part of our first year of engagement, we noticed the following: 1 Medium is the Message: Depending on the industry and country that the company is based in, adjustments to our engagement channels and the usage of local language both serve to optimise our engagements with companies. 2 Local Knowledge is an Edge: Being proficient in the local language and customs, combined with having detailed knowledge of the climate ambitions of the country in which the issuer operates, can mean the difference between an effective engagement and a non-reply. 3 Accountability is Key: When companies link climate change metrics and targets to their senior management’s variable incentives, there is a good chance that engagements will be taken more seriously as an accelerant for strategy development and implementation. 4 Patience is a Virtue: Company structures vary across industries and countries and creates different levels of bureaucracy and lines of reporting. As such, the entry point of engagement (i.e., the first point of contact for engagement) is essential and patience in navigating these structures for engagements is key. Change is often a multi-year endeavour.
In the theme of climate change and decarbonisation, it appears that outcome-driven engagements with SOEs to develop the targets and disclosure is a multi-year journey.
For example, in the case of engaging with Chinese State-Owned Entities (“SOEs”), we found that by navigating language and culture barriers, choosing the appropriate mode of communication, engaging with the appropriate decision makers, framing our requests in line with National Commitments, and offering support for improved reporting and target setting, enhanced our engagement sessions and optimised them for follow-up actions and results. In the theme of climate change and decarbonisation, it appears that outcome- driven engagements with SOEs to develop the targets and disclosure is a multi- year journey.
believe it is important, especially in the markets in which we operate, to continue our engagement activities, even as clients may choose to exit coal producers and energy generators due to excessive, unrewarded climate risks that they possess. Eastspring hopes to leverage on the long- standing relationship and regional expertise of engaging with these coal companies to encourage them to accelerate their transition. As such, we have elected to continue to engage with the companies that were identified in 2021 but have since been divested. We plan to continue being a part of the wider dialogue on climate transition and adaptation so that as these companies evolve, they may once again become part of our investible universe.
Just Transition In Asia and emerging markets more generally, the concept of a just and
inclusive transition is a necessary ingredient of the world’s move to more sustainable energy sources. In particular, the issue of access to electricity looms large, as many communities have only recently been afforded access to this essential service. Transitioning the energy mix, whilst maintaining this access to electricity, is the key challenge of a just transition. We
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