IMPORTANT INFORMATION
All data as at 31 December 2025, unless specified otherwise. This document is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. We strongly recommend you seek independent professional advice prior to investing. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. Any forward-looking statements are based on CCLA’s current opinions, expectations and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated. All names, logos and brands shown in this document are the property of their respective owners and do not imply endorsement. These have been used for the purposes of this document only. CCLA Investment Management Limited (registered in England & Wales, No. 2183088, at One Angel Lane, London EC4R 3AB) is part of the Jupiter Group, and is authorised and regulated by the Financial Conduct Authority.
Foreword
What is Good Investment?
Our responsible investment approach
2025 a year in action
Stewardship and engagement
Appendix 1: 2025 engagement record
Appendix 2: Shareholder proposals
Appendix 3: Investors supporting CCLA engagement
Appendix 4: Governance and our portfolios
Appendix 5: Climate pledge and portfolio carbon footprint
Appendix 6: Memberships and initiatives
Appendix 7: Industry recognition
Appendix 8: Standards, frameworks and initiatives
2026 Better World
Stewardship outcomes for the year 2025
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result
Better environment
A history of climate action
Our climate engagement goes back a long way. Since 2012, it has been instrumental in bringing the investment industry together on this theme through Aiming for A, a forerunner of Climate Action 100+. In 2025, we engaged with every portfolio holding on its approach to the climate.xv We also commenced a new engagement workstream focusing on the counterparties used in our cash funds.
2007
CCLA is an early signatory to the UN Principles for Responsible Investment
2010
CCLA starts its climate action pathway with a carbon disclosure watchlist
2012
The shareholder advocacy campaign Aiming for A is launched (it will go on to be an inspiration for Climate Action 100+)
2013
CCLA’s COIF Charities Ethical Investment Fund restricts investment in thermal coal and tar sands
CCLA becomes a cornerstone investor in the Bluefield Solar Income Fund
2015
CCLA files successful climate-related ‘Strategic Resilience for 2035 and Beyond’ resolutions at BP and Shell, as part of Aiming for A
2016
Aiming for A files successful climate-related shareholder resolutions at Anglo American, Glencore and Rio Tinto
2017
Aiming for A is superseded by Climate Action 100+, of which CCLA is a founding member
CCLA joins the Powering Past Coal Alliance
2019
CCLA’s COIF Charities Ethical Investment Fund restricts direct investment in oil and gas extraction companies
Following engagement, Duke Energy commits to net-zero emissions by 2050
CCLA works with the UK and Canadian governments to launch the Powering Past Coal Alliance’s Finance Principles
2020
With the UK government and others, CCLA becomes a seed investor in the Clean Growth Fund
CCLA sells its remaining direct holdings in oil and gas extraction companies
CCLA’s Helen Wildsmith wins the Joan Bavaria Award for her pioneering work on responsible investment and climate action
CCLA joins the Financing a Just Transition Alliance
2021
CCLA’s lead role with Unilever under Climate Action 100+ contributes towards the first FTSE 100 climate-plan vote
CCLA becomes a founding signatory to the Institutional Investors Group on Climate Change’s Net Zero Asset Managers initiative
NextEra Energy responds to engagement by increasing its climate disclosures
2022
Helen Wildsmith joins the Delivery Group of the UK government’s Transition Plan Taskforce as an investment-sector expert on mining and electrical utilities
2023
The Transition Plan Taskforce issues its final disclosure framework
A climate-related shareholder resolution co-filed by CCLA at Bank of America receives strong shareholder support (28.5%)
2024
CCLA joins the Institutional Investors Group on Climate Change’s UK Policy Working Group
CCLA and the Local Authority Pension Fund Forum (LAPFF) write to 76 FTSE 100 companies on transition plan votes, supported by 39 investors representing £1.6 trillion in assets under management
Following engagement, Empiric Student Property puts its environmental, social and governance (ESG) targets and transition plan to a shareholder vote
A NextEra Energy shareholder proposal co‑filed by CCLA achieves 33% of the shareholder vote
2025
Unilever publishes an updated climate policy engagement review, showing stronger alignment across its industry associations and retaining the top InfluenceMap score
Support for the CCLA–LAPFF transition plan vote initiative rises to £3.1 trillion
CCLA starts engaging with approved listed counterparties for cash funds on their alignment with climate goals, with a focus on fossil-fuel expansion
Staying the course for climate stewardship
The year 2025 had its challenges. Global temperatures continued to rise, with the world off track for limiting the increase to 1.5 °C. The 30th United Nations Climate Change Conference (COP30) provided some positives, including agreements to scale up finance for developing countries and for adaptation, although harder decisions on fossil-fuel reduction were again deferred. As UN Secretary-General António Guterres warned, ‘The hard truth is that we have failed to ensure we remain below 1.5 degrees … Every fraction of a degree means more hunger, displacement and loss.’
Across the investment landscape, political pressures prompted some institutions to reconsider their involvement in climate alliances, creating shifts in collaborative initiatives. These have been real headwinds, but the direction of travel has not changed. More investors expect companies to engage in transition planning, there is growing interest in climate stewardship, and continued investor engagement provides a credible route for supporting real-world decarbonisation and safeguarding long-term value. CCLA continues to stay the course in its stewardship work.
Equity holdings under better environment engagement
Equity holdings under better environment engagement
The table below places the portfolio companies in the scope of the better environment engagement pillar into five performance levels, based on the themes identified above. The key indicates progress or deterioration evidenced during the 2025 calendar year. Where a company is covered by more than one theme, its position is determined by its lowest placing.
Benjamin Schwartz/The New Yorker Collection/The Cartoon Bank
The companies listed on this page represent CCLA’s equity holdings in the scope of the various better environment engagement themes. Equity holdings were taken on 1 January and 1 July 2025. Any companies purchased after 1 July will come into the scope of our portfolio engagement in 2026.
*Not held in CCLA portfolios at 31 December 2025.
Our approach to climate action
As stewards of our clients’ investments, we use our financial power and ownership rights to push companies forward on reducing the emissions associated with their operations and value chains.
Our strategy has three components:
1
Avoiding harm. We avoid investing in companies that are highly exposed to changing legislation and regulation aimed at tackling climate change. Accordingly, we do not invest directly in any companies that focus on extracting, producing or refining coal, oil sands, oil or gas. For the remaining companies (i.e. those not restricted on these grounds), we determine whether they align with the goals of the Paris Agreement on climate change.
2
Engaging for change. Investors can be instrumental in encouraging companies to reduce their own environmental impacts. In 2025, building on work that commenced in 2010, we engaged with every portfolio holding on its approach to decarbonisation.xvi We also commenced a new workstream focused on the counterparties in our cash funds. Climate considerations are woven into our bespoke voting template.
3
Pushing for progressive policy. We believe that governments must create conditions that render it economically viable for businesses to phase out damaging activities – in particular, those that contribute to climate change. For this reason, we are working with policymakers, both in the UK and overseas, to encourage more meaningful regulatory action.
Financial institutions and fossil‑fuel financing
Financial institutions and fossil‑fuel financing
Our stewardship work has historically focused on listed equities. However, while equities represent the largest proportion of our assets under management (46% as at December 2025), they are by no means the only asset class that we deploy on behalf of our clients.
The second largest asset class in our overall mix of investments is cash and money market instruments, representing 30% of our total assets under management (as at December 2025). This asset class comprises our cash-focused funds – the CBF Church of England Deposit Fund, the COIF Charities Deposit Fund and the Public Sector Deposit Fund – which are also held within our core long‑term multi-asset funds.
The objective of our cash funds is to offer a high level of capital security and a competitive yield to investors. The funds primarily invest in certificates of deposit, but they also use term deposits and notice accounts. All three offer an interest rate in exchange for a predetermined holding period. These investments are allocated to a diversified selection of financial institutions, comprising both banks and building societies.
CCLA maintains an approved list of financial institutions, which represents the menu of counterparties eligible for use by our cash team. To determine this list, we assess institutions on various indicators of financial strength and on several environmental, social and governance (ESG) indicators. Since Q3 2025, each approved listed financial institution has also been ranked into an improved multi-level scoring system, enabling us to identify laggards and prioritise engagement. The revised framework is available on our website.
A key focus of the new framework is the approach taken by financial institutions to fossil-fuel financing. We rank financial institutions on the strength of their Reclaim Finance oil and gas, and coal expansion policies, and engage with them to help them move forward. The objective is to encourage counterparties to strengthen their coal, oil and gas expansion policies with a view to supporting the eventual phase-out of these fuels.
In September 2025, we sent letters to each of the listed institutions approved for use by our cash team (40 companies). By the end of the year, we had received responses from 12 companies and had met six. See page 59 for a case study.
It is important to note that apart from one or two outliers, we do not hold shares in the financial institutions used by our cash team. We are therefore without the rights that come with being a part-owner. Nonetheless, as an investor in the financial instruments that they issue, CCLA is a client of these firms, and we expect them to engage and take steps to improve in areas of concern. We look forward to reporting on outcomes next year.
Strengthening accountability on climate transition plans
Investors increasingly expect listed companies to explain how they are addressing climate risks and regulatory change. CCLA has long worked with peers to promote transparency and accountability in UK climate transition planning.
In the past year, alongside the Local Authority Pension Fund Forum (LAPFF), we coordinated sending letters – backed by over 50 investors representing £3.1 trillion in assets – to FTSE 100 chairs. We asked companies to give shareholders a vote on climate transition plans at least every three years. We have been coordinating these letters annually with LAPFF since 2021.
Since the ‘Say on Climate’ initiative began in 2021, around one-fifth of FTSE 100 companies have put climate transition plans to a shareholder vote. CCLA invests in several companies that have done so, including the London Stock Exchange Group, Rio Tinto and Unilever, with Unilever becoming the first FTSE 100 company to introduce a ‘say on climate’ vote following dialogue. After our outreach in 2025, most companies responded, with eight indicating or implying that they intend to provide a shareholder vote at a future annual general meeting.
xv Equity holdings were taken on 1 January and 1 July 2025. Any companies purchased after 1 July will come into the scope of our portfolio engagement in 2026.
xvi Equity holdings were taken on 1 January and 1 July 2025. Any companies
purchased after 1 July will come into the scope of our portfolio engagement in 2026.