UK’s asset owner introduces Climate Transition Index in £160 billion decarbonisation push

Phoenix Group, a UK asset owner, has introduced a climate transition index as part of its commitment to redirect £160 billion towards decarbonisation efforts over the next 18 months. 

This ‘climate aware’ index series, developed in collaboration with FTSE, leverages data from the Transition Pathway Initiative (TPI). 

The index aims to guide Phoenix in favouring companies deemed to have credible plans for climate transition. 

Established in 2017 by UK asset owners and now administered by the London School of Economics, TPI assesses the effectiveness of corporate decarbonisation commitments in terms of implementation and governance.

Also read: Climate Action 100+ backed by Global Asset Owners Post Wall Street pullback 

Sindhu Krishna, Phoenix’s head of sustainable investment, co-authored a 2022 paper for the Net Zero Asset Owner Alliance. The paper urged benchmark providers to enhance their offerings of net zero indices.

Krishna told IPE that the new FTSE index enables Phoenix to adapt its decarbonisation goals over time in response to evolving climate risks and policy developments. “We will do analysis on our side to monitor climate risks and adjust accordingly,” she explained.

“So we don’t set a rule that means having a decarbonisation pathway makes you eligible, and that’s it – we’re constantly reviewing those pathways to understand if they need to be steeper or shallower.”