6 January 2025
Welcome to our first sustainability update in 2025.
In many ways 2025 will represent a key year for our industry. As we enter the new year, we are now only five years away from the scheduled end of the UN Sustainable Development Goals (SDGs). These are a series of 17 ‘Global Goals’ that were set by the United Nations in 2015 as part of a rallying call to drive the change the world needs to see. Ten years later they have become one of the key tools sustainable investors use to both organise and communicate their activity.
But, as we reach the final third of their lifespan and with progress a long-way behind where it was anticipated to be, it is right to question how effective we, as the investment industry, have been in contributing towards the Global Goals.
For us, when it comes to the SDGs, sustainable investors took a wrong turn. Instead of seeing them as a to do list, a significant work programme that we could lend our weight to, many investors saw the SDGs as a fancy new outfit that could be used to dress their portfolios in. Like a fashion designer preparing models for a catwalk, some investors have rushed to show off their collections using tools and reporting mechanisms, like SDG calculators, that put a fresh look on their portfolios. But, as we all know, particularly as the excesses of Christmas begin to show, fashion often does not reflect reality. New clothes can only cover up so much, and style only lasts a little while before a lack of substance begins to show.
So, we see the SDGs in a different way. For us, they are not something to look like, or a fashion to align with, they are something to contribute to.
At CCLA, we believe that investors need to recognise the world for what it is, not pretend it is some shiny ideal, and work to make it better. This means investing in businesses that need to improve and using engagement to make them better. It means rolling up our sleeves, and getting a little bit dirty, as we put our weight behind efforts to drag the world forwards. This is hard, and it definitely doesn’t look pretty, but it makes a difference.
Hopefully this newsletter shows how we are putting our ‘nose to the grind’ as we seek to help build a better world, and why, in 2025, looking a little rough and ready is always better than catwalk perfection.
Continuing to fight modern slavery
Ending modern slavery is UN Sustainable Development Goal 8.7. At CCLA we believe that businesses are well placed to contribute to this effort by working to ‘find, fix and then prevent’ modern slavery in company supply chains.
To support this work, we have published the second iteration of the CCLA Modern Slavery UK Benchmark. This assesses and ranks 110 UK-listed companies on their compliance with the UK Modern Slavery Act, conformance with Home Office guidance and efforts to find, fix and prevent modern slavery.
The good news is that we have seen significant progress. Since our first benchmark in 2023, thirty-five companies have improved their score. We are also pleased that it is becoming a recognised, and useful, resource with 10 companies mentioning the benchmark in their public reporting. However, despite the progress, we are concerned that few, if any, UK-listed companies are detailing the steps that they have taken to help the victims when they’ve been found.
This has to improve, and will be a key part of our engagement work in 2025.
Key milestones:
- We have continued our engagement with Nvidia in relation to its downstream human rights due diligence processes, following allegations that their semi-conductor chips had been found in Russian weaponry. We have met Nvidia several times during the year. The company is now working with a human rights consultancy called Article One to undertake a Human Rights Impact assessment, which includes upstream and downstream risk. Discussions continue.
- We have joined forces with Guy’s & St Thomas’ Foundation to commission a scoping review to explore the role of investors in tackling corporate air pollution. The outcome is a proposal to develop a global benchmark to assess company preparedness and resilience to the impacts of urban air pollution.
- Our corporate mental health benchmark was shortlisted for the prestigious PRI Award for ‘System Stewardship’. This approach to benchmarking and engaging with companies on their approach to protecting the mental health of their employees continues to drive change.
CCLA in the news:
- ‘FCA’s SDR Regime is ‘intentionally painful’’: CCLA’s James Corah and Jasper Berens tell Money Marketing why, despite the pain it has caused many in the investment industry, the FCA’s Sustainability Disclosure Requirements regulation is essential for building a more meaningful sustainable finance sector.
- ‘Christian Investing Initiative is Launched’: Investments and Pensions Europe discuss the important role of faith investors with CCLA’s Chief Executive Peter Hugh Smith.
- ‘Forced Labour is a ‘feature of the system’ in the UK: PA Future interview Dame Sara Thornton and Dr Martin Buttle about the CCLA modern slavery benchmark.
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