A large UK pension manager gave a frank and detailed description of engagement with oil and gas companies, relating to enhanced disclosure and increased action on climate initiatives, particularly the 2C degree scenario. He emphasized the need for more ‘credible’ institutional leaders to ‘step up’ regarding climate issues, and suggested that the media could be used to exert pressure if needed. The pension fund’s next emphasis is on ‘active bias and culture change’, company by company.
An SRI fund manager pointed out that not all want to engage, citing a recent UKSIF survey of fund managers that have no engagement policy and/or haven’t set engagement objectives. Some managers cited fear of a short-term share price drop as a reason to avoid engagement. This led to a healthy debate regarding divestiture as a strategy, with mixed opinions. Some managers stressed that their funds wouldn’t allow for divestiture without significant explanation to an oversight committee; others used fiduciary tools such as board ‘against’ votes or accumulating larger positions to engage more proactively.