Olga Hancock on driving momentum for net zero in the real economy

Ahead of the Sustainable Investment Forum Europe in Paris on 2nd May, Olga Hancock from the Church Commissioners for England spoke to Climate Action about driving momentum for net zero in the real economy and the importance of understanding political and cultural nuance across different countries and circumstances when engaging with policy makers.

Q. Can you tell me about your role at the Church Commissioners?

I lead the responsible investment (RI) team at the Church Commissioners for England. The RI team works with the internal investment teams across all asset classes to implement our RI strategy of addressing three key systemic risks: social inequality, climate change and nature loss. The fund has a range of different asset classes: from longstanding direct ownership of real assets in the UK, forestry both in the UK and abroad, public and private markets, and alternatives. We also have a significant external interface, working with other investors on both corporate and policy engagement.

Q. How difficult is it to create and apply sustainable investment policies across assets and which are the most challenging?

The Church Commissioners have been implementing both ethical and responsible investment policies for several decades, under the guidance of the Ethical Investment Advisory Group – so it’s very much part of our DNA. It is a fascinating process to apply a consistent ethical approach across such a variety of different asset classes. The most challenging assets are those for which we do not have complete ESG data, such as private equity and venture capital.             

Q. When creating a net zero strategy how do you drive momentum in the real economy?

In 2023 we published our climate action plan, which sets out the ways we meet the challenge of driving momentum in the real economy. Our focus is on real-world change, so our strategy is guided by three questions:

• How can the real economy get to net zero (real-world change)?
• What are the levers the Commissioners can use to bring about this change?
• How can we maximise our influence?

To answer these questions and prioritise our efforts, we have adopted a framework which sits within our overall approach to responsible investment. Our framework includes three levers:

• Aligning our processes, which is crucial for a system level change
• Engagement, which ranges from having a dialogue with tenants, to speaking with large international companies and policymakers.
• Investing in solutions that are directly aligned with the energy transition.

Q. What are the greatest challenges you have faced when engaging with policymakers? 

Policymakers, whether politicians or civil servants, are generally very receptive to messaging put forward by investors that supports both good economic management and the integration of sustainability into the public policy process. The challenge for investors is understanding the political and cultural nuance across different countries and circumstances. This is a new area for investors, so we are just learning.

Q. What work is the fund doing with regards to biodiversity, in particular deforestation?

Deforestation sits at the heart of climate change, food scarcity and water security, all issues that many parts of the world are struggling to address. For this reason, we have chosen it as our initial focus within the nature and biodiversity workstream, due to its inherent link to the systemic risk posed by nature and biodiversity loss. In recognition of the critical role forests play in regulating global temperatures and protecting biodiversity, we published a Deforestation Policy in 2022.

To translate this policy commitment into effective action, we work with others as part of joint initiatives such as Nature Action 100, Finance Sector Deforestation Action (FSDA) and the Investor Policy Dialogue on Deforestation (IPDD). In the summer of 2020, the Church Commissioners was a co-founder of IPDD, an investor-led initiative whose goal is to engage in a policy dialogue with public agencies and industry associations and other stakeholders, on halting deforestation. The Church Commissioners sits on the IPDD Management Committee, and co-founded and co-chairs the Indonesian working group. Focusing on deforestation, the aim is to ensure the long-term financial sustainability of investments by promoting sustainable land use and forest management. The coalition has grown to encompass three formal workstreams, focusing on producing countries with the highest deforestation risk, as well as consumer countries (countries that consume products from regions with high rates of deforestation).

As co-chair of IPDD’s Indonesian workstream, I travelled to Jakarta in October 2022 and met with key stakeholders in government and business to discuss how to advance sustainable finance in Indonesia – and how institutional investors can support the country’s efforts to reduce deforestation.  

Olga Hancock is Head of Responsible Investment at the Church Commissioners for England and will be speaking at the Sustainable Investment Forum Europe, The Pullman Montparnasse in Paris on 2nd May - please register here.