In a busy year for the Church of England Pensions Board's ethics and engagement director, Adam Matthews has been recognised for his prominent role across a number of collaborative investor engagement initiatives.
Matthews – who has been in post at the pension fund since 2018 – is active in a number of initiatives, such as the Transition Pathway Initiative (TPI), Climate Action 100+ (CA100+), the Institutional Investors Group on Climate Change (IIGCC), and the Investor Mining & Tailings Safety Initiative (IMTSI).
Nonetheless, he emphasises to Environmental Finance that, at the £2.8 billion ($3.5 billion) pension fund, "everything we do is collaborative".
"We have a very clear view as a fund that we will not be able to change things by ourselves. It is about finding the partners – and it is partners – that really share the same values, same ambitions to affect the change."
In 2017, Matthews co-founded the TPI – for which he still serves as co-chair – which assesses the preparedness of companies for the transition to the low-carbon economy, compared with the international targets made as part of the Paris Agreement.
The TPI is currently supported by more than 75 investors with combined assets under management and advice of over $20 trillion.
For Matthews, tools like TPI are "absolutely critical" to setting ambitions for achieving the aims of the Paris Agreement. For that reason, Matthews is excited by the response from other pension funds to the CofE Pensions Board's launch in January of the custom-made FTSE TPI Climate Transition Index in collaboration with the index maker FTSE Russell – part of London Stock Exchange Group – and the TPI.
The index – to which the pension fund allocated an initial £600 million – is "dealing with some questions that have been open for some time in terms of the role of passive and the connection to stewardship," he said. "Whether you can embed forward-looking data, whether you can be clear on the basis upon which companies are in or out of an index, and whether they can be connected to clear goals. I think we've addressed a lot of those questions."
Nonetheless, Matthews returned to the point that this could not have been achieved without the collaborative work done by the TPI since 2017.
"We've now got to a point where there's a critical mass of companies assessed," Matthews said of the TPI. "You don't need to divest from a sector, you can differentiate within it – between those that are positioning themselves to transition or not. That is quite empowering for asset owners and reinforces the transition and change in the real economy."
Matthews has also been a passionate voice to improve safety at tailings dams, composed of waste generated from the extraction of elements such as copper, gold and iron ore.
In January – on the eve of the anniversary of the Brumadinho dam disaster in Brazil, which left 270 people dead – the Global Tailings Portal was launched by IMTSI to catalogue the location of tailings dams. IMTSI – co-led by the CofE Pensions Board and Council of Ethics of the Swedish National Pension Funds – is now close to agreeing a global industry standard for such dams.
This "different" approach to engagement on the issue, Matthews said, reflects what he believes was a failing in their previous engagement following the 2015 collapse of the Mariana dam in Brazil, resulting in 19 deaths. The Mariana dam was co-owned by BHP and the Brumadinho dam owner Vale.
After Mariana, investors engaged with the company rather than the issue and felt the assurances by the firms meant it had been dealt with – which it had not. This time the focus has been not to focus on engaging the firm but instead "go for the problem", Matthews said, taking a more interventionist approach in the process.
Matthews has also been prominent in applying pressure on blue chip firms to improve their climate practices. In September, the pension fund co-filed a shareholder resolution at FTSE 100-listed BHP, calling on it to suspend membership of industry associations which do not lobby in line with the Paris Agreement. In April, pressure on Shell by CA100+ – with Matthews as co-engager for the initiative – resulted in the oil supermajor strengthening its climate ambitions.
Overall, these activities reflect the view of Matthews that investors have a key role to play in pushing the sustainable agenda.
"The role of the investor or asset owner is such a unique one. You are positioned across countries, across industries and through value chains, and you have an ability – with the right group to convene and to establish programmes of change – to either be supportive of societal objectives or actually shape and drive them."
He added he felt "privileged" to have played this role, driven by the increasingly powerful investor collaborations in which he has been involved. EF