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Partnership with Prudential
Introduction
Active ownership
ESG integration
Climate change
Community and people
A final word
Publishing the Just and Inclusive Transition white paper
Driving Just Transition via the NZAOA
to low carbon economies, whilst acknowledging that emerging markets will be more impacted by climate change despite having contributed less to cumulative greenhouse gasses already emitted. Policy : Prudential provided input for the NZAOA’s oil and gas position paper, which presents expectations for companies (i.e., users and producers), governments, and investors. The paper adopted our recommendations that more in-depth consideration be given to the unique transition challenges of emerging markets, and how investor engagement can be both impactful and consistent with principles of differentiated responsibilities and a just transition. Looking ahead to 2023, Prudential will be taking more of a leadership role in NZAOA’s emerging market thematic workstreams. For more information on Prudential’s advocacy in the region and across industries bodies, please refer to the Prudential 2022 ESG Report.
In 2021, Prudential joined NZAOA – a network of institutional investors committed to the decarbonisation of their asset portfolios – to facilitate greater collaboration with global peers. As an active member, and one of the only members with an emerging market footprint, Prudential supports their wider policy and outreach work, including the Emerging Markets Transition Investment (“EMTI”) project. In 2022, Prudential’s continued focus has helped to ensure that emerging markets feature more prominently in NZAOA communications and discussions. Eastspring participates and contributes to these discussions, lending our expertise in Asia to bring an added perspective of the challenges that these markets face in the energy transition. By raising awareness, it generates thinking on relevant solutions that more actively consider the impact of climate change on emerging and developing markets. We believe this represents a key and critical step in acknowledging developing economies in the just and inclusive transition. In 2022, Prudential and Eastspring supported specific NZAOA sub-tracks, advancing progress on: Financing the transition : Prudential initiated and leads this sub-track and started the EMTI project, with the objective of accelerating investment towards the net-zero transition of emerging markets. Monitoring, Reporting, and Verification (“MRV”) : Submitting commentary through the public consultation, Prudential advocated for integrating a guiding design philosophy on sovereign bonds into the NZAOA’s new protocol. The additions emphasise support of a just and inclusive transition
In 2022, Prudential published a white paper Supporting a just and inclusive transition to outline the importance of prioritising a fair transition in meeting the Paris Agreement goals. It highlights three ways in which it is approaching a fair transition: A Raise awareness on the challenges for emerging markets in the energy transition and developing solutions; B Responsible investment must act as a key driver to build a greener future; and C View the challenges of the transition through broadened perspectives because climate change touches on other aspects including health, gender, and vulnerable communities. These require both public and private investments, and the mainstreaming of investment in the energy transition. The paper seeks to stimulate helpful debate and raise awareness of a fair transition for emerging markets, and explores case studies and further actions required, both from Prudential and the wider market. The paper also details how Prudential contributes to a just and inclusive transition in emerging markets through its influence as an insurance company and asset owner operating in emerging markets. As an insurance company and a long-term investor in local markets, Prudential is interested in their sustainable long-term development. The approach to the just and inclusive transition focuses on making sure emerging markets are not left behind in the global energy transition. Eastspring complements the Prudential’s approach particularly through our active ownership activities, as Eastspring drives engagement with companies on funds that we manage on their behalf. For more information on our active ownership activities, please refer to page 31.
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