When it comes to climate change, an investor’s engagement impact is a function of three quantities: how far the company moves towards Paris-alignment (PA), what share of responsibility the investor holds for that movement (SR), and the market share of the company by revenue (MS).







PA: Movement towards Paris-alignment. We focus on three kinds engagement outcomes. A company may shift its political lobbying in line with the priorities of the Paris Agreement, on a spectrum from obstructionism to active support. A company may green its business model, either through direct changes to assets (e.g., coal-plant retirements), new capital expenditure (e.g., on the expansion of renewable assets), or research and development spend (e.g., on carbon capture storage). In both of these cases, we can trace an engagement’s direct effect on a company’s real-world activities. We also look at company-wide targets. Although their real-world effects are always indirect, they represent major commitments, and often serve as pivot-points in companies’ business strategy. We measure the impact of a target by looking at their quality, at their scope, intermediate targets, and implied rate of decarbonization. It is also possible to benchmark various changes internal to a company – to governance, process and policy – against recognised standards like the UK Stewardship Code, and against the rest of the market. We do not assimilate these different outcomes (targets, business model, political lobbying) into a single commensurable scale, to weigh them against one another. We believe they are qualitatively distinct routes to the same over-arching goals of the Paris Agreement.