Investors are increasingly scrutinising corporate engagement on climate policy as it plays a critical role in helping governments create practical climate policy solutions. However, corporate engagement on climate policy is a double-edged sword. 

Negative and resistant corporate interest, often represented by third-party organisations, can hinder policy action that aims to mitigate the impacts of climate change. This can cause a number of issues for investors including legal and reputational risks, and long-term portfolio volatility.

In response to this, the PRI launched a collaborative engagement and an investor expectations statement in 2015, focusing on the direct and indirect policy engagement practices of companies on climate issues. The aim of the engagement was to:

  • understand how companies communicate their own policy positions on climate;
  • understand how companies monitor the associated policy positions of their third-party organisations;
  • understand what actions are taken when the positions of these third-party organisations do not align with the company’s climate change policies and positions; and
  • communicate investor expectations outlined in the statement.

This document serves as a guide for investors when engaging with investee companies on climate policy lobbying. It explains why investors should engage on this topic, suggests questions to ask investee companies and provides examples of corporate practice and PRI signatory case studies that showcase investor action.