How we do it - Preventable Surprises

Positive Mavericks

Global organisations that manage trillions of dollars and have established links with corporate – and sometimes political – decision-makers show a lot of immunity of change. Preventable Surprises approach is an Insider Outsider strategy, encouraging real change from the inside while putting pressure where it counts from the outside. Working with positive mavericks, who are employed by large institutions that only partially reflect their aspirations for a sustainable and ethical financial system, is at the core of what we do.

With asset gathering and personal incentives playing a powerful role in shaping the culture of finance, positive mavericks are the change agents who can persuade their institutions to go beyond what is convenient or easy to do, and to act in the best interests of clients, members, and of the sustainable institutional context they require.

We engage our community of positive mavericks in three ways:

Catalyst: We develop fresh concepts (e.g. systemic risk and forceful stewardship) on which we and others can build theories of change and organisational strategies.
Connector: We put together “positive mavericks” worldwide who can, together, develop more ambitious strategies than would be possible working in isolation.
Accelerator: Without vested interest, we are free to establish suitable ambitions.

Forceful stewardship

Forceful stewardship complements the normal approach to responsible investing – in which traditional investment decision-making is overlaid with a filter for environmental, social and governance issues – by focusing on the rights that investors have as owners. But forceful stewards also go beyond private engagements with investee companies, which lack transparency and are hampered by conflicts of interest. We are deeply pro market. But as experienced insiders, we know there are many reasons why the financial industry ignores systemic risks, such as climate change, until it’s too late.

“Forceful stewards” engage with companies, and use their full influence to make business part of the solution to address systemic risks. They vote for resolutions to send a public signal and thus to drive deeper and faster corporate change. Forceful stewards also engage with all the other players involved in investment – from research analysts to investment consultants to regulators and policy institutions – to ensure they, too, play their part in addressing systemic risks.

In summary, a forceful steward does three things:

Indicates in advance a willingness to vote in favour of resolutions requesting action to address systemic risks, and to vote against management if the company has repeatedly failed to take action to limit systemic risk.
Makes it clear in private engagements with board directors and senior executives that box ticking will not be sufficient; results matter and should match the urgency of the situation.
Requires other market participants and institutions to review corporate disclosures and advise on portfolio implications. And advocates for essential regulatory changes that align incentives in financial markets with risk mitigation and long-term wealth creation.

Online dialogues

We use online dialogues as a means to connect and broker honest conversations between people – investors, NGOs, academics, scientists – from multiple continents. We use the Currnt online engagement platform, which allows us to set up multiple topic sessions that our participants can join at their convenience, contributing to multiples streams of discussion. We have held six dialogues on climate issues in 2015-18, and one each on biodiversity and corporate political capture in 2021.

Asian Utilities: Our March 2018 dialogue invited discussion around the role of banks and investors in combatting development of new coal infrastructure in Asia. The power sector in Asia is estimated to produce 20% of global emissions. Discussion tackled the most appropriate narrative to use in different Asian countries, the role of British banks in financing new coal plants, and Japan’s support of fossil fuel development in other Asian countries. An event summary and infographic capture highlights of the three-day event.
Transition Plans: In June 2017, dialogue participants engaged on whether scenario plans or transition plans would be more effective in reducing emissions at electric utilities. While the majority supported the latter approach, we also identified obstacles to transitioning to transition plans. An executive summary and an infographic are available summarising the event.
Focus on Emissions: In September 2016, we held an online dialogue to plan for the 2017 annual general meeting season. The outcome was an agreement to focus on resolutions calling for low-carbon transition plans at U.S. utilities. We published two summaries of the event, an article and an infographic.
Forceful Stewardship: In April 2016, our dialogue focused on developing the forceful stewardship skills needed to support 2°C transition plans. See event summary.
COP21 Strategies: Our November 2015 dialogue set the stage for activism in the wake of the COP21 meeting in December in Paris. See event summary.
Increasing Investor Awareness: Our first online dialogue in August 2015 was a discussion around how investors can best address climate risk, which formed the basis for the rest of our dialogues. See event summary.
In February 2021, we held a week long online dialogue bringing together 90 participants from financial markets, science, academia, civil society and other stakeholders groups. An extensive summary captures the wealth of the conversations with daily provocations and syntheses, select responses and observations from the participants, a list of actionable ideas and survey data. Winning without win-win represents Preventable Surprises’ own take-aways from the dialogue, as well as from many more recent developments on Environmental, Social and Governance (ESG) finance and climate action. They aren’t meant and do not claim to be a consensus view of dialogue participants.
In May 2021, a online dialogue brought together a global community of investors concerned with corporate political capture, a capstone to our Corporate Lobbying Alignment Project.