PGI switches unit holders to climate-indexed approach

Perpetual Guardian Investments (PGI) has adopted index provider FTSE Russell’s climate change index based on the transition pathway initiative (TPI).

Wednesday, December 20th 2023, 6:27AM 1 Comment

by Andrea Malcolm

PGI chief investment officer Tim Chesterfield says defining its investable universe by the FTSE Russell TPI indices is part of PGI’s new strategy for New Zealand and Australian equities.

The TPI is a global, asset-owner-led initiative which assesses companies’ preparedness for the transition to a low-carbon economy and aligns their investments with the Paris Agreement.

It was created by the Church of England and the London School of Economics’ Grantham Research Institute on Climate Change and the Environment and is based on forward-looking measures to evaluate a company’s management of climate-related risks and opportunities.

“Working with FTSE Russell as our index provider enables us to structure our investments with a keen focus on the need for rapid and sustained reductions in greenhouse gas emissions,” says Chesterfield.

“This partnership allows us to take a globally leading climate-indexed approach which is a first among wealth managers in Australia and New Zealand. It means we are changing the investment direction for 1,700 unit holders to a climate-aware model which does not apply a blanket exclusionary policy. Rather, it rewards better behaviour with increased investment – companies are part of the solution.

“We are taking into account both backward-looking measures, such as fossil fuel reserves, and the forward-looking TPI Quality Management Score, which allows us to work with companies to address climate-related risk and governance and encourages positive change.”

FTSE Russell head of Pacific - index investments group David Ho says, the partnership underscores the companies’ shared dedication to delivering sustainable investment solutions to investors and unit holders that prioritise long-term value while addressing climate risk and opportunities.

“Right from the outset, it was clear that Perpetual Guardian Investments has a commitment to serve its unit holders and offer them a solution that addresses their investment needs in this way.”

PGI’s investment solutions are fully flexible and invest in New Zealand, Australian, global equities and property alongside New Zealand, Australian, and International fixed interest investments.

Tags: Perpetual Guardian