Six Applications of TPI Research

    Stockholm (NordSIP) – The Transition Pathway Initiative (TPI) has published a TPI in Practice report, collecting six articles describing investors’ application of TPI’s climate management and carbon performance data in their investment processes. The six contributors to the report are Robeco, Brunel, Pinebridge, Länsförsäkringar, USS and the Church of England Pensions board. Throughout the report the six contributors strongly endorse the versatility and reliability of TPI data.

    Management Quality and TPI Data

    Robeco’s contribution counts with insights from its Engagement Specialist Cristina Cedillo Torres, who describes the advantages of using TPI data. “With so much conflicting information out there, one of the benefits of using TPI assessments is the consistency of data. By tracking the same indicators each year, using the same scenario assumptions, we can see real change over time – or identify where it’s not happening,” Cedillo is quoted as saying. The specialist singled out TPI’s Carbon Performance indicator as well as TPI’s management quality scores.

    Brunel appeared to echo this line of argument when it highlighted the way it uses TPI’s management quality scores, describing how it set targets for engagement and for investment based around this measure.

    PineBridge’s Alessia Falsarone, Managing Director and Head of Sustainable Investing,  again highlighted the importance of TPI data, while noting that the Initiative has helped the asset manager fill the gap between issuers’ long-term commitments and near-term behaviours.

    Transition Leaders and Laggards

    Länsförsäkringar’s Head of Responsible Investment, Kristofer Dreiman, discussed how the Swedish insurance and pension company uses TPI data to approach companies in transition. “We strive towards implementing more sophisticated exclusion policies and we realised that a static exclusion list based on current performance failed to distinguish between companies which are on a journey towards better climate performance and those which are not. Using TPI data allows us to support those companies which are on this journey.”

    The Universities Superannuation Scheme (USS) is one of the largest occupational pension schemes in the UK, with around £68 billion in assets under management. According to  David Russell, USS Head of Responsible Investment, TPI’s research helps identify those companies lagging in their climate transition management. “We find TPI data especially helpful in our voting and engagement activities.”

    Next Generation Climate Index

    The Church of England Pensions Board chose to highlight the FTSE TPI Climate Transition Index, which it developed in partnership with FTSE Russell and uses TPI data to determine which companies should be included.

    The index claims to be first passive product that can embed forward-looking data and aims to be the next generation of climate index. According to the report, “the Index shows that being invested passively does not mean an institution has to be passive in exercising the climate and stewardship responsibilities that beneficiaries expect.”

    Image by Joseph Mucira from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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