Today, the Institutional Investors Group on Climate Change (IIGCC) released its much anticipated Net Zero Bondholder Stewardship Guidance – Engaging with Corporate Debt Issuers. The guidance provides advice for bondholder stewardship across different types of bonds with a long-term approach across the financing lifecycle.
This guidance is a good first step, but lacks the necessary red lines for when investors must stop engagement and deny debt.
“We commend IIGCC for recognising that bondholder stewardship is a necessary tool that investors should use to accelerate and strengthen bond issuers’ climate transition strategies and net zero alignment. But for bondholders and issuers to take the transition seriously, investors must use their power to stop funding to companies continuing to expand fossil fuel production. This requires investors to adopt a robust timeline for escalation and a clear commitment to deny debt if the issuer continues with expansionary plans.”
– Alice Delemare Tangpouri, Coordinator of the Toxic Bonds Network.