In 2024, the world experienced its warmest calendar year on record, with average global temperature exceeding 1.5°C above its pre-industrial level for the first time. This milestone year also saw a series of extreme weather events, including record-breaking heatwaves, droughts, wildfires, and hurricanes in the US, and storms and flash flooding in Europe, Brazil, and Asia, causing billions of dollars in damage. These events underscored the urgent need to limit further climate change.
At the same time, Artificial Intelligence (AI) became a prominent business tool, offering significant productivity gains. However, it also increased energy consumption, posed threats to individual jobs, and introduced new business risks such as unintended bias.
With the ongoing conflicts between Russia and Ukraine, and in the Middle East, geopolitical instability continued in 2024. Despite some relief from inflationary pressures, the economic landscape remained challenging, with the continued stagnation in real wage growth doing little to alleviate the rising “cost of living” faced by many. These intertwined environmental and macroeconomic challenges have emphasised the critical importance of our advocacy and stewardship efforts throughout 2024.
Amidst these challenges, 2024 was a remarkable year for elections as voters in more than 60 countries went to the polls. The year concluded with a number of notable losses for incumbents around the world, which is likely to bring new approaches to tackling mega-trends such as climate change, the risks to nature and biodiversity, digitisation and AI, and new policy responses to ease the cost of living and reduce geopolitical conflict.
These intertwined environmental and macroeconomic challenges have emphasised the critical importance of our advocacy and stewardship efforts throughout 2024.
Consequently, in 2024 we maintained our efforts to engage companies and their boards to address these and other sustainability-related trends, ensuring alignment with their fiduciary responsibilities and those of our clients. We also worked closely with policy-makers and standard-setters to ensure associated risks and opportunities are well-regulated in line with international best practices.
This, our fifth Stewardship Report, describes our continued stewardship work during 2024 and the outcomes of these activities. The Financial Reporting Council (FRC) is undertaking a review of the Stewardship Code and as such, has issued interim changes to reporting for existing Stewardship Code signatories. The key changes made by the FRC can be found here.
We made use of these interim requirements in order to make our report more easily digestible for readers. Therefore, in relevant sections where there are no material changes and the FRC does not require us to update disclosures, we have provided a short summary and cross referenced our previous Stewardship Report for further information.
Building on last year’s reporting, we have continued to expand our reporting on nature-related activities, with information from our second report on deforestation risk assessment and mitigation activities across our public markets, real estate, infrastructure, and direct lending portfolios. Elsewhere, we detail elements of our nature-focused advocacy work, such as our attendance at the COP16 Biodiversity Summit as part of the Finance for Biodiversity (FfB) Foundation delegation; co-authoring the Guide to Investing in Natural Capital for the One Planet Sovereign Wealth Fund initiative; and the publication of our call to action to end deforestation. We also consider our efforts to contribute to global efforts to tackle biodiversity loss through involvement with collaborative initiatives such as Nature Action 100.
FHL Stewardship Report 2024
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