The paper provides a tiered system guidance approach for investors on disclosure of their climate action plan. The report highlights the importance of environmental, social and governance (ESG) issues in investment decision-making processes to guide an organisation to consider all long-term investment values, including addressing the climate crisis. The report suggests that investors set targets for the Scope 1 and Scope 2 emissions of a company and industry, including Scope 3 emissions in a significant part of the sector emissions profiles, such as energy or finance. Additionally, the report recommends disclosing future plans to achieve the net-zero target, timeframe and potential solutions, including carbon emissions and portfolio assessment.

The report provides guidance for corporate engagement, such as bilateral engagement and collective/collaborative engagement, to engage with companies over their ESG practices. It is suggested that collective and collaborative engagement enable investors to share knowledge and good practice relevant to their specific structure and business model while building consensus on industry-specific standards. The report also recommends engaging at a policy level, specifically assessing investor’s lobbying and policy engagement roles. The investor’s role in advocating for corporate sustainability is to encourage policies that support high environmental, social, and governance standards. To achieve a successful advocacy role, the report suggested that investors should clarify their message, assessment of risks, assessment of costs and benefits and discuss how the policies align with their long-term goals.

In terms of investor disclosure, the report recommends that investors provide quantitative targets aligned to net-zero, including commitments, objectives and targets, carbon emissions and portfolio assessment and TCFD alignment, assessment of disclosure. It is recommended that investors progressively report the proportion of assets considered as net-zero and aligned, with a progression towards setting targets for private equity, sovereign debt and infrastructure.

Governance was identified as an important component in the report, suggesting that institutional investors have an obligation and responsibility to act in the best financial interests of their beneficiaries. The report provides a comprehensive plan for delivering on investor’s climate-related objectives, including policy advocacy, engagement with companies and improving corporate governance. A strong plan should be established to manage the climate-related risks and opportunities, with regular assessments of progress against the climate-related objectives, decarbonisation targets and avoided emissions. Lastly, the report suggests the board and senior management should oversee all of portfolio-related climate risks and opportunities and receive audited reports using consistent metrics regularly.