The Transition Pathway Initiative (TPI) is a global initiative led by asset owners and supported by asset managers. Aimed at investors and free to use, it assesses companies’ preparedness for the transition to a low-carbon economy, supporting efforts to address climate change.
Using publicly disclosed company information sourced and provided by TPI’s data partner, FTSE Russell, it:
- Evaluates and tracks the quality of companies’ management of their greenhouse gas emissions and of risks and opportunities related to the low-carbon transition;
- Evaluates how companies’ planned or expected future carbon performance compares to international targets and national pledges made as part of the Paris Agreement;
- Publishes online the results of this analysis through a publicly-available tool hosted by its academic partner, the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE).
Launched January 2017, the TPI is already supported by asset owners with over £7 / $9.3 trillion* assets under management. They have committed to using it in a range of ways, including to inform their investment research, in engagement with companies and in tracking managers’ holdings.
The TPI complements existing initiatives and frameworks, by aligning with prevailing disclosure initiatives and with investors climate change and sustainability expectations. It is also being aligned with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD).
Background on the initiative
The TPI was established as a joint initiative between the Church of England National Investing Bodies (Church of England Pensions Board, the Church Commissioners and CBF Funds) and the Environment Agency Pension Fund.
A Steering Group was created made up of asset owners from Europe and the US – including USS, Wespath, Calpers, AP1, AP3, AP5, Railpen, PGGM, Methodist Church and the West Midlands Pension Fund.
The Steering Group is jointly chaired by:
- Adam Matthews (Co-Chair), Director of Ethics and Engagement for the Church of England Pensions Board
- Faith Ward (Co-Chair), Chief Responsible Investment Officer, Brunel Pension Partnership Ltd (on behalf of the Environment Agency Pension Fund)
A dedicated Project Team led by Professor Simon Dietz and Dr Rory Sullivan oversaw the development of the assessment methodology, throughout which they constructively sought feedback from industry peers.
TPI’s on-going assessment work is guided by a Technical Advisory Group comprising expertise from academia, asset management and other relevant fields. The group undertakes regular reviews of the methodology and provides technical advice regarding TPI’s evolution.
A more detailed introduction to TPI is available here.
An overview presentation on TPI in Mandarin is available here.
*as of 5 June 2018