What we do
Through data-driven analysis, Universal Owner guides investors towards better stewardship of the global economy around climate
The current situation
The status quo will lock the global economy into high emitting infrastructure and business models for decades. The Paris Agreement and net-zero emissions pledges have achieved much in setting up a path towards a sustainable future, yet it is now evident that change is required at an even greater pace. In order to decrease global warming to below the IPCC’s target of 1.5°C, the relationship between the financial sector and climate needs a re-evaluation.
Within the financial system, institutional investors act as the intermediaries between individual investors and companies, appearing in the form of asset managers, pension funds, and sovereign wealth funds. These entities play a central role in global economic affairs, managing an enormous share of the world’s market capitalisation. In 2018, institutional investors in North America held $88.5 trillion in assets, while investors in the United Kingdom held assets worth more than $13 trillion.
Institutional investors have a unique capacity to use their power to transition the economy in line with the Paris Agreement and net-zero emissions by 2050. Through proposing shareholder resolutions, replacing the board and executive management of publicly traded companies, and engaging with investees in private and public channels, institutional investors can exercise the full weight of their financial authority, propelling the global transition to a low-carbon economy.
The problem
Despite the success of climate-motivated investor coalitions such as Climate Action 100+, the path towards effective investor engagements on climate is fraught with challenges. Retail investors lack shareholder representation, investors curtail too readily to company interests, and a culture of incrementalism prevails.
Above all this, however, is a more fundamental problem: investors and civil society care deeply about engaging successfully with their investee companies, but we have no clear theory about how to measure the efficacy of an environmental engagement. Without a robust set of metrics for defining engagement success, as grounded in substantial data and analysis, there is no way to guide investor action, compare investors’ climate credentials, or hold investors to account when they fall short.
The academic literature is clear that shareholder engagement is the most reliable mechanism for investors seeking to change company behaviour. However, no framework or database exists that measures the efficacy of investor engagement in this way. Universal Owner aims to change this.
The objective
Through data-driven analysis, Universal Owner guides institutional investors towards better stewardship of the global economy around climate. We aim to work alongside institutional investors to develop an original analytical framework to interrogate their climate impacts, creating a unique and market-leading set of metrics for measuring engagement success.
The research methods will draw upon techniques that Thomas O’Neill, Universal Owner Director, developed at the think-tank InfluenceMap to analyse corporate political lobbying and investors’ corporate engagement programs on climate.
The intent is that the results achieved through the analysis and the production of standardised metrics will become a mainstream benchmarking resource. This will support and drive institutional investors to more resolutely steward investee companies and the economy on climate.
