28 April 2021
As Larry Fink said in a recent McKinsey-FCLT panel, climate risk is also business risk. Several hundred public companies have woken up to this business risk, committing to remake their companies to achieve a net-zero carbon footprint in line with the Paris Agreement. Still, some traditional firms and investors remain hesitant. Part of the hesitancy comes down to materiality. In this info session, we will share our preliminary research findings, quantifying if, and by how much, public markets value corporate net zero commitments in the short, medium, and long-term. Findings encompass, but are not limited to, reactions in the equity, fixed income, and ESG spaces.Learn More
5 May 2021
33 of the world’s largest asset owners representing $5.1 trillion in AUM, through the UN-backed Net Zero Asset Owner Alliance, have made long-term commitments to achieve net-zero portfolio emissions by 2050. And while asset managers have been encouraging portfolio companies to take decisive climate action, those managers are now beginning to make the same commitment themselves.But these portfolio commitments to net-zero emissions are often decades into the future. And many investors have yet to develop practical ways to incorporate climate change into their portfolios or implement climate-based investment strategies in a uniform way. Rather than focusing solely on the companies in a bottom-up fashion, investors can take a top-down approach to drive long-term net-zero investment portfolio construction. By deciding at the highest level which portions of a portfolio will be silent on climate, which will invest according to the owners’ principles, which will incorporate future carbon expectations, and which will be used to catalyze change, an asset owner has clear levers to pull to track progress along a glide path toward meeting longer-term climate commitments.
This working group session will focus on the implementation of a top-down approach to net-zero portfolio construction for a long-term investor and gather feedback on the tools required to operationalize such an approach.Learn More
10 May 2021
Please join us on Monday May 10th for a 60-minute virtual conversation hosted by Sarah Williamson, CEO of FCLTGlobal and Laura Sanderson and Dee Symons of Russell Reynolds Associates with perspectives from seasoned board chairs.
In late 2019, Russell Reynolds Associates and FCLTGlobal (Focusing Capital on the Long-term) launched an extensive research effort to understand how corporate directors consider time horizons in their work: how the topic is discussed in the boardroom; facilitating alignment between and among management and the board and investors; and how a long-term orientation influences director recruitment, assessment and selection. For this discussion, we will focus on the role of the board of directors in setting a long-term tone at the top, how long-term boards operate differently, and how that contributes to their company’s long-term success – particularly as companies today grapple with not only a global pandemic but also a rapidly evolving environment for reporting and disclosure.
This event is invitation-only and will convene a small group of current directors of UK publicly listed companies for a conversation run under modified Chatham House Rule – a summary of unattributed remarks will be published following the event.Learn More
25 May 2021
Climate change is altering current and future risk/return trade-offs for many companies and investors, while also presenting emerging opportunities. Future-oriented businesses and investors are recognizing the need to confront the issue of climate change in their respective industries, leading to a rapid increase in climate-related disclosure from publicly listed companies alongside an increasing popularity for net-zero emissions commitments.
One quarter of S&P 500 companies and approximately 10% of MSCI All Country World Index (ACWI) constituents have made net-zero emissions commitments. But these commitments to net-zero emissions are often decades into the future, and detail about how they will be achieved is scarce, leaving investors with little information about how capital will be allocated in pursuit of these goals or how achievement of net-zero commitments will contribute to long-term value creation. Investors need a clearer view of how a company plans to invest behind achievement of their net-zero target, with KPIs that track progress along the way.
Building on FCLTGlobal’s 2019 Roadmap for communicating long term strategy, this working group will focus on adapting long-term roadmaps to frame the investor/corporate dialogue on climate-related strategy.