Chapter 6

Question 1

How does the FCA define stewardship?

Answer 1

Responsible allocation and management of capital across institutional investment community to create sustainable value for beneficiaries, the economy, and society

Question 2

What does the Uk stewardship code require, which is leading?

Answer 2

ESG to be embedded into investment deciison making, including identifying and responding to climate risks.

Question 3

What does the TCFD require on governance?

Answer 3

Disclosure on how the board oversees climate risks and opportunities, and management’s role in assessing and managing climate-related risks and opportunities

Question 4

What does the NZAOA suggest asset owners require of asset managers on climate engagement?

Answer 4

Disclosure on:
1. Governance and integration
2. Setting and publishing a climate engagement strategy
3. Climate engagement practices
4. Transparency and accountability on climate engagement

Question 5

What requires asset managers to disclose voting approach?

Answer 5

EU’s Shareholder Rights Directive II (requirement)
ICGN Global Stewardshio Pricniples (guidance)
UK stewardship code (recommendation to disclose voting records)

Question 6

The Investor Agenda produced the Investor Climate Action Plans, providing recommendations on?

Answer 6

1. Managing climate risks in portfolios and shifting capital to opportunities
2. Engagement with companies
3. Just transition advocacy
4. Disclose details of these activities

Question 7

The PRI provides guidance to investors on transition planning through its Climate Change Strategy Project, which suggests what 3 steps?

Answer 7

1. Measure
2. Act
3. Review

Question 8

What does GFANZ require of members?

Answer 8

Ensure climate targets are science-based, net zero by 2050 across all scopes and have interim targets
Also focused on engagement, but mainly on supporting engagement with clients on their transitions

Question 9

Which organisation produced the Global Investor Statement on Climate Change?

Answer 9

The Investor Agenda

Question 10

What should you assume when calculating temperature alignment?

Answer 10

Company overshoot applies to all companies. Apply to portfolios by replacing company overshoot with an UNWEIGHTED average of overshoots and apply this.

Question 11

Fossil gas and nuclear are ruled out of the EU taxonomy alignment when?

Answer 11

Looking to exclude activities that do not make a “substantial contribution” to climate change mitigation