12 January 2024
CCLA has long harboured an ambition to be a catalyst for positive change in the world. 2023 was, in many ways, a groundbreaking year for us. Some highlights in our active ownership work are listed below.
Better environment
Target: Sustainable Development Goal 13: Take urgent action to combat climate change and its impacts.
Climate
We view climate change as the largest threat to our planet, ecosystems and communities. As stewards of our clients’ assets, it is crucial that we use our financial power and ownership rights to push companies forward on reducing the emissions associated with their operations and value chains.
- Net zero commitment – our ambition is to reach net-zero emissions for our listed equity holdings by 2050 or sooner. We aim to meet these targets through work to accelerate the transition to a low-carbon economy, rather than through significant changes or restrictions on portfolio composition. We remain on track to achieve this target.
- Policy engagement – CCLA has been working with the UK and Canadian governments’ Powering Past Coal Alliance since 2018 and is represented on the Delivery Group of the Government’s UK Transition Plan Taskforce (TPT). Landmark TPT guidelines were issued in 2023.
- Climate stewardship - CCLA does not invest directly in any companies that focus on extracting, producing or refining coal, oil sands, oil or gas, nor any company in high carbon sectors that we believe do not align with the Paris Agreement. Nonetheless, there are companies in our portfolio that contribute to climate change. We focus our active ownership work on the 30 largest greenhouse gas emitting listed equity holdings in our portfolios and met with 16 of them in 2023.
Plastics
In 2023, we co-signed a letter to the EU Parliament supporting proposed plastic waste reduction regulations and wrote to members of the High Ambition Coalition (HAC) governments in support of an ambitious approach for a robust, legally binding Global Plastic Treaty. We also co-signed an investor statement relating to plastics packaging and joined associated investor collaborations with PepsiCo and Unilever.
Biodiversity
In 2023, we joined the Nature Action 100 (NA100) engagement initiative. CCLA co-signed letters to 100 companies deemed to be systemically important in reversing nature and biodiversity loss by 2030. We will be engaging as part of a NA100 for three portfolio holdings in 2024: AstraZeneca, McDonald's and Zoetis.
Better work
Target: Sustainable Development Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all.
We are principally concerned with the recognition and support for human and labour rights. We expect investee companies to respect International Labour Organisation (ILO) Core Conventions, the ILO Fundamental Principles on Rights at Work and to promote ‘decent work’. Where this is not evidenced, we look to take remedial action.
Modern slavery
- CCLA Modern Slavery UK Benchmark
- In 2023, we launched the inaugural CCLA Modern Slavery UK Benchmark, assessing and ranking 97 of the largest UK listed companies on their modern slavery disclosures.
- During the year we met with 26 benchmarked companies to discuss our findings and to suggest ways in which each could improve. Companies will be assessed for a second time in 2024 and we look forward to reporting on progress.
- Find it, Fix it, Prevent it (FFP)
- FFP is an investor collaboration created, convened and resourced by CCLA. The collaborative engagement group consists of 28 investors, which focus on engaging with companies in the high-risk sectors of hospitality and construction.
- CCLA coordinates the investor coalition and is also responsible for leading (or co-leading) engagement with InterContinental Hotels Group, Compass Group, Marshalls, Genuit and Persimmon.
- Public policy
- CCLA’s Dame Sara Thornton (former UK Independent Anti-Slavery Commissioner) has led our policy engagement work throughout 2023, continuing to advocate for clear legislation requiring asset managers and other investment businesses to report annually on the steps that they have taken to uncover and fight slavery in their portfolio.
- In 2023, we engaged with the Home Affairs Committee, the Home Office, and the Department of Work and Pensions, as well as with numerous international organisations and academic institutions.
Amazon and worker rights
At the end of 2022, we co-filed a shareholder proposal calling for Amazon's Board of Directors to commission an independent assessment of Amazon’s adherence to its stated commitment to workers’ freedom of association and collective bargaining rights. The proposal went to vote in May and received 35% of the overall vote (42% of independent shareholders' vote). In December 2023, we co-filed for a second time. The investor group co-filing alongside us has grown threefold since last year, which shows a growing willingness by investors to take a stand. We will report on the outcome in 2024.
Living Wage
In early 2023, we commenced engagement with several UK-listed companies with the aim of persuading them to become Living Wage accredited. In 2023, Admiral Group became a Living Wage employer, and Watches of Switzerland indicated that it is seeking accreditation.
Better health
Target: Sustainable Development Goal 3: Ensure healthy lives and promote wellbeing for all at all ages. Ensuring healthy lives and promoting wellbeing at all ages is essential to sustainable development.
We believe that investment markets will only be as healthy as the environment and communities that support them. Engaging for better public health is a key priority in our stewardship work.
Mental health
- CCLA Corporate Mental Health Benchmark
- In 2023, we launched the second iteration of our multi award-winning corporate mental health benchmarks (UK and Global).
- We assessed 207 companies, of which 119 engaged directly with CCLA on this topic. 42 companies (with a combined workforce of more than seven million) improved their performance during the year.
- Global Investor Coalition on Workplace Mental Health
- We continued to build support for the Global Investor Coalition on Workplace Mental Health. As at 31 December the coalition had 52 signatories with a combined £6.9 trillion in assets under management.
Nutrition & obesity
We support both ShareAction’s Healthy Markets Initiative and the Access to Nutrition Index. Through these coalitions, we have been engaging with four investee companies for several years: Unilever, PepsiCo, Nestlé and Coca-Cola. Unilever and Nestlé have made significant improvements over the past year. PepsiCo and Coca-Cola are laggards; in December, we co-filed a shareholder proposal at Coca-Cola on the topic.
Infant formula milk
Throughout 2023, we continued to engage with companies where we have concerns about their approach to the manufacturing or marketing of breast milk substitutes: Abbott Laboratories and Reckitt Benckiser (please note that these companies are not currently eligible for investment in the COIF Charities Ethical Investment Fund, although they are owned in other funds as at the end of 2023). Discussions will continue in 2024.
Collaborating for change
At the end of 2023, CCLA sustainability initiatives were supported by 111 investors worldwide, with a combined £17.2 trillion in assets under management.
All data. Source: CCLA as at 31 December 2023, unless stated otherwise.