In this edition of our Sustainable Investment Review, we step back a little to review the role of trust in sustainable finance. Recent developments such as new regulations, and rapidly diverging views on ESG, prompt questions about trust and transparency, especially given the current gap between public perceptions and the levels of trust that the financial industry relies on.
Leading off the section focused on trust, Storebrand Group CEO Odd Arild Grefstad shares his thoughts on how this factor contributes towards a robust society and an enabling environment for sustainable investment.
That same issue – trust – lies at the heart of some of our major efforts in active ownership during the second quarter. One such effort was submission of a shareholder resolution on climate lobbying disclosure at this year's annual general meeting of Toyota Motor Corporation. The decision followed a stall since last year in our ongoing engagement with Toyota on its climate lobbying policies.
We expect our investees to engage with policy makers responsibly, within a process for monitoring and reviewing climate policy engagement that is transparent to investors. Here, Toyota fell significantly short of our expectations. However, we believe that openness and transparency on this significantly material issue, will enhance Toyota’s market value.
Our shareholder proposal was supported by proxy advisors, and many U.S. and European asset managers and owners. Unfortunately, the proposal did not pass at the meeting. Yet this escalation step, which was unprecedented in the company's history, got the attention of the company's management and board, signaling that in the current era, openness and transparency about governance and climate policy are expected and cannot be ignored.
A formalised Nordic investor alliance on active ownership may be one way to help ensure that we meet our stewardship commitments, Storebrand Asset Management CEO Jan Erik Saugestad notes, in his commentary on active ownership. Collaborative engagements are growing in importance, in response to challenges of ensuring that the world's biggest companies are aligned with sustainability goals. During the quarter, we took a significant step on that front with the World Benchmarking Alliance, where we are a leading a joint engagement that has formally presented demands to the Nordic oil and gas leader Equinor regarding plans for a just transition.
The issues are urgent, and the public is increasingly aware: a newly published "Climate Shift Index" shows that a quarter of the world's population personally felt that they experienced strong influence of climate change on at least one of the days this past July. The change in attitudes comes on the back of a summer period featuring many extreme climate events, including heat records and unusual levels of wildfires. Responding to stakeholders' concerns in this context is an important element of building and maintaining trust.
However, as research by Lauren Juliff and Henrik Wold Nilsen shows, good regulatory intentions might end up disadvantaging technological solutions that are vital to our transition to a greener economy. Sustainability regulation should pay attention to the nuances of emissions reporting and be willing to assess dilemmas of sustainability to address issues of greenwashing, which we ultimately consider a trust issue.
You'll find these and many more updates on our sustainable investment activities in this edition. We hope you'll find it interesting and informative!
