Resolutions, Policies and Coalition work

This section presents our resolutions, policies and coalition work.

CLIMATE EMERGENCY DECLARATION – ANNUAL STATEMENT 2021 (valid until September 2022). 

In September 2019, we published a Climate Emergency Declaration stating our view that “the prevention of runaway climate change is an eco-socio-economic challenge and prerequisite to achieving our objective of a sustainable and fair economy” and that we believe “it is the responsibility of every institution, business, investor and employer to transition their purpose and operations to be consistent with keeping global heating below 1.5°C.”

We made commitments covering investments, grants and operations, which are available on our website, including to report annually on progress as part of our annual report. In 2020/21:

  • We used our influence as a shareholder to “promote a just and net-zero carbon transition”. This included co-filing a shareholder resolution at HSBC in January 2021, along with 14 other institutional investors. The resolution was coordinated by ShareAction and called for a net-zero transition plan and timetable to divest fossil fuels, in line with the climate science. We withdrew it in March following negotiation with HSBC on the wording of its management resolution, which commits HSBC to alignment with the Paris climate agreement, including short and medium-term science-based targets and to divestment from coal.

At the HSBC AGM in May, the resolution passed with 99.7% of the shareholder vote. Regular meetings are being held with HSBC as it develops its coal policy and wider climate strategy. Further action could be taken in 2022 if they are inadequate.

Throughout 2020/21, we have also been using our shareholder influence to engage energy utility companies to adopt formal just transition strategies to accompany net zero plans, securing the world’s first strategy from SSE plc (see investment report above).

  • We have used our influence with asset managers and the market to “ensure active and high standards of shareholder engagement on climate change”. These standards featured heavily in our ‘ESG investing olympics’ tender for a new asset manager, and subsequent ‘state of the sector’ report and market recommendations (see investment report above).

We have engaged one of our asset managers to act on climate misinformation by one its largest holdings, Alphabet, the parent company of YouTube and Google. Our manager requested YouTube de-prioritise content featuring climate denialism in a similar way to extremist content and stop it from being monetised. A policy was announced and implementation is being monitored.

  • We have particularly favoured investments in “companies whose business model focus is on net-zero carbon transition”. Our social investments have a focus on community energy and include Riding Sunbeams, Awel Wind Co-op, and Egni Solar Co-op. Our mainstream investments include a new manager with investments in renewable energy, green bonds and energy transition (see investment report above).
  • We committed a strand of our grant work to ‘fair transition’, to address the risk of ‘stranded people’ and ‘stranded communities’ in terms of skills and economic utility, including as a result of the rapid and far-reaching changes needed to decarbonise the economy. We view a fair transition as a necessity for a rapid and resilient net-zero transition.

In 2020/21, we gave a grant of £101,200 to Community Energy England to support ‘transitioning to a fairer, decentralised, decarbonised and democratic energy system’ and £30,000 to Power for People for its Local Energy Bill campaign. We also gave a grant of £252,707 to the Womens’ Budget Group for its ‘Feminist Green New Deal’ programme and £50,000 to 350.org for its ‘Green New Deal Rising’ programme for youth leadership (see table of grant holders above).

  • We have used our influence to support public policy engagement. In 2021, we match-funded a Climate Coalition campaigner to advocate for community energy in the run up to COP26. We also helped mobilise some of the 75 signatories to an open letter in support of the Environmental Audit Committee’s recommendations on community energy.
  • Whilst the pandemic has disrupted the delivery of some operational commitments, we have:
    • reduced our catering carbon footprint by switching to meat-free catering;
    • signed up to the ‘Climate Perks’ commitment from climate charity Possible to offer staff paid ‘journey days’ to encourage low-carbon holiday travel;
    • engaged our property manager and supported them to introduce building-wide recycling and basic energy efficiency measures; and,
    • reviewed our travel policy to privilege public and sustainable transport.

We will build upon the progress made in 2020/21 and continue to deploy our resources and use our influence to help accelerate the transition.

 

HSBC

FPF’s Climate Emergency Declaration states we will “Use our influence as a shareholder to promote a just and net-zero carbon transition” and “call for the adoption of business models that are consistent with keeping global warming below 1.5°C”.

In January, we co-filed a shareholder resolution at HSBC along with 14 other institutional investors, co-ordinated by ShareAction. We withdrew it following successful negotiations with HSBC on the wording of its management resolution. It commits HSBC to align its financing with the Paris climate agreement, including short and medium-term science-based targets, and to exiting coal in the OECD by 2030 and globally by 2040.

The resolution passed with 99.7% of the legally binding shareholder vote. Regular meetings are being held with HSBC as it develops its coal policy and wider climate strategy.

COP26 declaration: climate expectations of asset management

FPF, ShareAction, and the grant funded ‘Invest for Change’ campaign by Students Organising for Sustainability, have produced the ‘COP26 declaration: asset owner climate expectations of asset management’.

It is a set of minimum standards and aims to send a strong market signal and help other asset owners, journalists, civil society, and policy makers to judge what is good practice and what is greenwash, as asset managers make claims to climate leadership during the COP26 climate talks.

The declaration was launched at a COP26 fringe event in Glasgow in November and has had over 25 signatures.