Eastspring Investments: Responsible Investment Report 2022
80
Financing the Transition: Emerging Markets Transition Investment project Prudential initiated and leads a sub-track within the Net Zero Asset Owner Alliance (“NZAOA”) on ‘Financing the Transition in Emerging Markets’, which includes EMTI project as a key component. The EMTI project was organised to identify practical, near-term solutions to accelerate investment towards the net-zero transition of emerging markets. The project is supported by the NZAOA, the World Economic Forum (“WEF”), and the EU- ASEAN Business Council. As part of the project, Prudential and Eastspring organised two round tables in 2022. During the first roundtable, participants across the financial industry discussed the main barriers for investing in the energy transition in emerging markets. The outcomes resulted in the publication of a discussion paper, Code Red: Urgent Action on Emerging Markets Transition Investment.
The outcomes are published in a discussion paper, Code Red! Call for Action on Responsible Corporate Engagement in Emerging Markets. Broadly, five key guiding principles for responsible and effective engagement in emerging markets have been identified: 1 Establish a local approach with an appreciation for the complexity and variation of challenges. 2 Integrate the ‘common but differentiated responsibilities’ principle of the Paris Agreement into the engagement approach, by adjusting asks to locally specific social factors and the aspects around just transition. 3 Be prepared for ongoing engagement, with sustained dialogue to build trust. 4 Commit to knowledge sharing between global and local investors. 5 Be flexible with the engagement ask – consider the practicalities around ambitious target setting. These guiding principles are supplemented with practical recommendations for implementation, which are grouped around the four themes. All recommendations are relevant for asset owners, asset managers, regulators, and other players in the financial sector engaging with companies. The last set of recommendations is specifically for regulators. Asset owners and asset managers are strongly encouraged to engage with regulators on policy; the asks of regulators on engagement should include these recommendations. The high profile of the supporting bodies within the EMTI project, together with the release of Prudential’s Just and Inclusive Transition white paper, combine to raise the external profile of the Group’s future actions with regards to ‘stewarding the human impacts of climate change’, one of the three pillars of Prudential’s ESG Strategic Framework.
The second roundtable focused on effective engagement in emerging
markets. The invitation-only roundtable was attended by 26 participants across the financial industry, including asset owners, asset managers, collaborative platforms, regulators, rating agencies, and non-governmental organizations (NGOs). Conducted under Chatham House Rules, the roundtable sought to unpack three questions: Sharing of best practices between asset owners and asset managers Regulatory dimension on engagement Collaborative engagement and sought to unpack
Made with FlippingBook - Share PDF online