The pandemic still poses many challenges, but the arrival of vaccines at the end of 2020 at least removed some uncertainty about the future. Looking ahead to the next 12 months, we aim to renew our focus on some of the goals we had previously set for 2020.

Climate change remains an ever-present and increasingly urgent concern. The last seven years have been the hottest seven ever recorded8 – but models struggle to convey the real-world consequences of climate change, such as recent extreme weather events in New South Wales, Australia, where devastating floods have hit communities just a year after rampant bushfires wrought havoc.

We want to be confident that the companies we invest in act responsibly in the face of the very real physical and transition risks climate change poses. Engagement is a powerful tool for effecting positive change, and we will continue to utilise it to make a difference on this and other ESG issues.

The TCFD recommends a reporting standard of 11 broad categories, with a clear emphasis on material risks. We support the use of this as a common reporting standard and will continue to encourage companies and fund managers to adopt the TCFD recommendations.

To further strengthen our own research, analysis and reporting to clients, we are continuing our work on identifying and incorporating relevant and actionable metrics to provide our clients and ourselves a deeper understanding of the ESG characteristics of our companies and third-party funds. Obtaining accurate and meaningful standardised data remains a real challenge, but we are committed to further progress in this area and are well prepared to fulfil new regulatory requirements that are being implemented.