What is CCLA’s approach to sustainable investment?
Our primary goal is to deliver strong financial returns for our clients. Since 1958, we’ve managed investments for not-for-profits and, more recently, for individual investors. Our aim is to deliver consistent, risk-adjusted returns to our clients in a way that aligns with their values and furthers their mission. We seek to achieve this through our Act, Assess, Align approach.
We believe that markets thrive only when the environment and communities that support them are healthy. That’s why we focus our engagement on climate change, nature and biodiversity, human rights and good work practices, health, and corporate governance. Through engagement with companies and policymakers, we push for better practices and collaborate with other investors to amplify our impact.
How do you approach engagement on climate change?
Climate change is a long-term challenge that threatens both our environment and the stability of financial markets. The science is clear: we need action now.
The best way to address the risks associated with climate change is not only to manage climate risk in portfolios but also to work towards stopping climate change itself. We engage at both the policy level and with individual companies. For the latter, we use clear metrics to measure progress.
In policy engagement, we are working for effective regulation, stronger disclosure standards, and the setting of clear transition pathway,s especially for high-impact sectors.
Where we engage with companies on climate, we aim to push them to disclose and develop credible transition plans. This includes setting measurable emissions reduction targets and reporting progress against these. We also prioritise areas such as corporate lobbying and alignment with a company’s own public climate commitments.
What are the biggest policy challenges for climate action today?
Many countries have yet to update their Nationally Determined Contributions (NDCs) under the Paris Agreement – commitments essential for reducing emissions. Without stronger commitments, the world risks falling further behind on necessary emissions reductions to limit climate change.
At the same time, there are headwinds from regulatory rollbacks, notably in the US, where deregulation is gathering pace, and in Europe, where recent legislative changes such as the omnibus package, have weakened the momentum behind implementing climate transition plans.
Where regulations have been pared back, such as the removal of sector-specific transition standards in the EU, we have continued to work with others to provide appropriate guidance for companies. For example, we have contributed to the principles set out by the Institutional Investor Group on Climate Change for developing sector decarbonisation roadmaps. This type of guidance helps ensure that investors’ perspectives are considered by policymakers.
We are also actively involved with the GFANZ (Glasgow Financial Alliance for Net Zero) Policy Workstream, which is tackling these broader policy challenges, most recently focusing on how financial institutions can help make NDCs more credible and investable.
Constantly changing climate regulations creates uncertainty, slows progress and complicates future planning for companies. As investors, we can push back against policy setbacks and advocate for stronger frameworks that support both economic resilience and long-term value creation.
What progress have you seen in your engagement?
We have seen progress in the form of stronger climate transition plans, more detailed disclosure on capital allocation to low or zero-carbon technologies, and more transparency on the monitoring and governance around climate lobbying.
To give some examples in practice, we encourage companies to provide a visual representation of their climate transition plans, as this helps investors understand the levers for change, and the emission reductions expected from them. The European reporting standards give helpful guidance on this. At our most recent meeting with Siemens, they cited our engagement as a direct reason for producing such a representation.
We also ask companies to detail how they plan to allocate capital to transition-related projects or technology related to their transition plans. Companies that use the EU taxonomy provide the most useful insights, and again, Siemens provides a good example of this.
Finally, we work extensively with companies to ensure clarity on their own climate lobbying policies and to assess the positions of their trade associations. We have seen cases where companies publicly support strong climate regulation while their trade associations actively oppose it. To address this, we encourage companies to disclose their trade association memberships, the lobbying positions of these associations, and any misalignments.
We have had notable success with Nestlé and Unilever, both of which have issued climate policy engagement reviews. InfluenceMap, an independent NGO that rates these reviews, gave Unilever a perfect score of 100%.
What will you focus on in 2025?
With growing pushback on climate action and to some degree on engagement, we remain firm in our stance that climate risk is a long-term financial risk. In 2025, we will continue pushing for real-world decarbonisation through both corporate and policy engagement.
Asset owners require clear frameworks to align their investments with climate goals, and we will actively support them in this process.
Addressing climate change as the greatest long-term systemic risk is more crucial than ever. We will advocate for robust corporate disclosure and science-based target setting, using our influence as investors to shape corporate strategies both independently and in collaboration with other investors. We will push for greater transparency in how companies allocate capital related to decarbonisation goals, ensuring that company investments lead to meaningful emissions reductions. We will challenge companies to integrate climate risk into their business strategies, ensuring their transition plans are credible and measurable. At the policy level, we will push for stronger climate regulation, reinforcing the link between climate policy and financial stability.
Fast facts
No. 1 investment manager of UK charities*
£15.3bn in assets under management**
60+ years of Good Investment
£22.3tn of assets supporting CCLA initiatives in mental health and modern slavery**
189 team of staff**
Early signatory (2007) to Principles for Responsible Investment (PRI)**
5✶ rated by PRI for listed equities**
*By number of charities. Charity Finance Fund Management Survey 2024
**CCLA: Internal as at December 2024
What we do
Firmly believing that healthy financial markets depend on healthy communities, CCLA has a long track record of instigating change for a better world with its pioneering work on climate, modern slavery and mental health.
Founded in 1958, CCLA is independently owned by its clients and staff. CCLA is authorised and regulated by the Financial Conduct Authority.
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