FinanceMap Asset Management Methodology
Analyzing asset managers on portfolios, engagement, and resolutions through a climate lensApril 2023

Table of Contents
Introduction ..................................................................................................................... 2
Portfolio Analysis ............................................................................................................. 3
Assessment Universe.................................................................................................................................. 3
Exposure Metrics ........................................................................................................................................ 3
Portfolio Paris Alignment ........................................................................................................................... 4

Stewardship Scoring ......................................................................................................... 9
Background .............................................................................................................................................. 10
Stewardship Assessment Methodology .................................................................................................... 11

Policy Engagement ......................................................................................................... 20

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Introduction
While there are efforts underway to codify climate-related issues into financial regulation, climate change
action within finance is currently largely focused on voluntary, non-binding initiatives. As a result, there is aneed from a range of stakeholders for an independent assessment of how the world's leading financial
institutions are performing on climate change.
FinanceMap provides research that looks at the financial sector through a climate lens with a primary focus on
asset managers and banks, comparing their top-lines commitments and targets to their actual climate-relevantbusiness activities. The objectives of this research are to (i) provide key stakeholders with insights into how thefinancial sector is performing on climate change, (ii) drive improvement within the sector itself by providing
benchmarking information, and (iii) increase the accountability of financial institutions for their climate-related
commitments and statements.
This document summarizes FinanceMap's methodology for assessing the performance of asset managers on
climate change. This assessment is largely divided into three streams: (i) portfolio analysis, (ii) stewardshipscoring, and (iii) policy engagement scoring, each with its own metrics and methods. The following sections
expand upon each of these methodologies in depth.

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Portfolio Analysis
Assessment Universe
FinanceMap’s assessment of asset management portfolios begins at the level of investment funds. Concretely,
this research seeks to identify all equity investment funds worldwide with over $10 million in net asset value(NAV). These funds and their portfolios are allocated to the asset managers which manage them. FinanceMap
assesses asset managers at the level of the highest parent financial group, including all subsidiary asset
managers under the parent. FinanceMap assesses portfolios both at the level of individual funds as well as at
the level of the asset manager. An asset manager’s portfolio is defined as the aggregate portfolio of all of its
funds’ portfolio holdings.
FinanceMap relies on Refinitiv Lipper to identify funds, their asset managers, and their portfolio holdings.
Concretely, a list of all equity investment funds which meet the $10 million NAV threshold is created from thedatabase. Data on the fund manager as well as the fund holdings for each of these funds is then extracted,
where available. Depending on the fund, the holdings data dates from the most recent day, month, or quarterend. In mapping out the asset management sector, FinanceMap identifies approximately 30,000 equity funds
managed by over 1,200 asset managers globally.
FinanceMap uses two primary types of metrics to analyze fund and asset manager portfolios: (i) exposure
metrics, and (ii) portfolio Paris alignment scores.

Exposure Metrics
FinanceMap analyzes the exposure of portfolios to (i) fossil fuel value chain companies, and (ii) companies
which are primarily active in transitional activities, or “green” companies. Exposure metrics are calculated bothin absolute value and as a percentage of the portfolio’s total value. The following sections explain how
FinanceMap identifies fossil fuel and green companies respectively.

Fossil Fuel Exposure
FinanceMap calculates a portfolio’s fossil fuel exposure by flagging all companies in a portfolio which areprimarily active in fossil fuel production value chains on the basis of their BICS, GICS, and NAICS sector
classifications. The fossil fuel production value chain is defined as the universe of companies of which theprimary sector of operations is in or uniquely related to the up-, mid-, and/or downstream segments of oil andgas production or the coal mining sector. This includes companies of which the primary operations are services
specific to these sectors (e.g. exploration, surveying, pipeline infrastructure, etc.).

Green Exposure

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FinanceMap defines green companies on the basis of the EU taxonomy for sustainable activities (abbr. “EUtaxonomy”). Specifically, all companies with over 75% of revenue deriving from activities which demonstrate
substantial contribution to climate change mitigation under the EU taxonomy are considered “green” under
this methodology.
FinanceMap gathers data on companies’ percentage of revenue contributing to climate mitigation from
Bloomberg. Specifically, Bloomberg Terminal provides data for the “estimated revenue demonstrating
substantial contribution to climate change mitigation” under the EU taxonomy. FinanceMap supplements thiswith Bloomberg data on companies’ revenue in BICS sectors which are classified as having substantial
contribution to climate mitigation with no criteria (e.g. solar or wind power generation, production of zeroemissions vehicles, power storage, etc.) All companies with over 75% revenue in either the former or the sumof the latter are considered “green”.

Portfolio Paris Alignment
The other primary metric FinanceMap uses to analyze investment portfolios is the Portfolio Paris Alignment(PA) Score. This metric uses the industry-standard Paris Agreement Capital Transition Assessment (PACTA)
tool, an open-source methodology managed by RMI and expanded upon by FinanceMap, to measure thealignment of a portfolio of companies with the IEA Net Zero Emissions by 2050 Scenario (NZE). For an in-depth
elaboration of the PACTA methodology, please refer to 2DII’s PACTA documentation. A condensed explanation
is given below, followed by the full methodology behind FinanceMap’s use of the PACTA outputs to calculate
the Portfolio Paris Alignment Score.

PACTA
PACTA is an open-source portfolio alignment methodology developed by 2DII, which calculates the forwardlooking alignment of a portfolio of companies with science-based climate scenarios. To do so, PACTA uses
physical asset-based data, created by Asset Impact, to estimate the total future production of real-economy
companies in climate-relevant sectors. The dataset used contains forward-looking production data for
approximately 28,000 publicly and privately owned real-economy organizations across climate-relevant
sectors. Comparison of this real-economy production data against prescriptions by Paris-aligned climate
scenarios allows for the calculation of the Paris Alignment of companies and portfolios. FinanceMap uses the
IEA Net Zero Emissions by 2050 Scenario (NZE) in its application of PACTA.
Currently, FinanceMap uses PACTA analysis for four climate-relevant sectors: automotive, upstream oil and gas
production, coal mining, and electric power. The Asset Impact forward-looking production data at company
level is split into different 'technologies', i.e., types of output, within these sectors. For a specific real-economy
company, the data forecasts the number of units which the company will produce in each technology in eachyear. The following table shows the different production technologies analyzed within each sector.

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Sector

Unit of Production

Technology

Automotive

Light-duty vehicles per year

Electric
HybridInternal Combustion Engine (ICE)

Coal Mining

Tonnes of coal mined per year

Coal

Oil & Gas

Barrels of oil equivalent (BOE)

Oil

Production

extracted per year

Electric Power

MW installed capacity

Gas
Coal-fired
Gas-firedHydropower
NuclearOil-fired
Renewables

Table 7. PACTA production technologies by sector.
The IEA NZE, meanwhile, sets out a pathway with a 50% chance of limiting global warming to 1.5° C by 2100.
This pathway consists of roadmaps for the different sectors, prescribing production targets for the different
technologies within a sector for every year between now and 2050. PACTA translates these sector-level targets
to company-specific targets, allowing the calculation of the gap between a company’s actual forecasted
operations and its target under the Paris-aligned NZE.
The following section explains how PACTA calculates technology-level Paris Alignment scores for a portfolio
based on the forward-looking data of its portfolio companies. Subsequently, top-line Paris Alignment scores
are calculated by FinanceMap at the sector and the overall portfolio level.

Technology Paris Alignment Scores
In order to calculate the Paris Alignment of a portfolio for a certain technology within a given sector, PACTA
first allocates the real-economy activities of the portfolio’s holding companies to the portfolio. Concretely, thetechnology production of each company is allocated to the portfolio proportionately to its equity ownership ofFinanceMap Asset Management Methodology, April 2023

5the company. For example, if a portfolio has shareholdings in Car Company A, amounting to 5% of the total
shares outstanding of this company, then 5% of Car Company A’s forward-looking production in internal
combustion engine vehicles, electric vehicles, and hybrids is allocated to the portfolio.
By summing the allocated production over all the companies in a portfolio, the methodology obtains theportfolio’s total owned forward-looking production in each technology in each sector. The same allocation andsumming process is applied to the companies’ NZE targets, giving a Paris-aligned target for the portfolio in
each technology. Calculating the relative difference between the portfolio’s total owned production in atechnology and the portfolio’s NZE target over a five-year timeframe gives the Paris Alignment score at
technology level. Note that the score is calculated such that overshooting the target gives a positive score forgreen technologies but a negative score for polluting technologies.
Thus, for a green technology 𝑖𝑖,
𝐴𝐴𝑡𝑡𝑡𝑡𝑡𝑡ℎ=𝑖𝑖
and for a polluting technology 𝑗𝑗,

𝑡𝑡𝑡𝑡𝑡𝑡ℎ,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
5∑𝑡𝑡𝑡𝑡=𝑡𝑡
𝑃𝑃
1 𝑡𝑡∑5𝑡𝑡=𝑡𝑡1 𝑃𝑃𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡ℎ,𝑁𝑁𝑁𝑁𝑁𝑁

𝐴𝐴𝑗𝑗𝑡𝑡𝑡𝑡𝑡𝑡ℎ = (−1) ∗ �−1

𝑡𝑡𝑡𝑡𝑡𝑡ℎ,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
5∑𝑡𝑡𝑡𝑡=𝑡𝑡
𝑃𝑃
1 𝑡𝑡
5∑𝑡𝑡𝑡𝑡=𝑡𝑡
𝑃𝑃𝑡𝑡𝑡𝑡𝑡𝑡ℎ,𝑁𝑁𝑁𝑁𝑁𝑁
1 𝑡𝑡

− 1�
𝑡𝑡𝑡𝑡𝑡𝑡ℎ,𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

Where 𝐴𝐴𝑡𝑡𝑡𝑡𝑡𝑡ℎ
is the Technology Paris Alignment Score for technology 𝑖𝑖, 𝑃𝑃𝑡𝑡𝑖𝑖

is the portfolio’s total

owned production in the technology in year 𝑡𝑡, and 𝑃𝑃𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡ℎ,𝑁𝑁𝑁𝑁𝑁𝑁 is the portfolio’s IEA NZE target for the technology
in the same year 𝑡𝑡. The production and corresponding NZE targets are respectively summed over the 5-year
timeframe assessed (𝑡𝑡1 to 𝑡𝑡5 ). As of March 2023, 𝑡𝑡1 is 2022 and 𝑡𝑡5 is 2026.

In this scoring method, a 0% alignment score indicates that the portfolio is aligned with the NZE. In this case,the portfolio (in allocated aggregate) owns assets which are forecast to produce an amount equal to the NZE
scenario-aligned production for those assets over the next five years. A negative score indicates that theportfolio owns too much polluting or too little green production compared to the NZE. A positive score showsthat the portfolio owns less polluting or more green production than the NZE prescribes.
Technology Paris Alignment scores are artificially capped at +100% and -100%, in order to avoid imbalance
between the possible range of positive and negative PA scores. For example, for green technologies, a
portfolio which owns zero actual production but has a non-zero scenario target would receive a scoreof -100%. However, very high numbers for actual green production with very low scenario targets could
technically lead to infinitely high PA scores. The opposite is true for polluting technologies, where portfolios
could have infinite negative alignment while being limited to +100% positive alignment.

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Sector Paris Alignment Scores
To arrive at the Sector-level PA score, the PA scores for each technology within a sector are combined using aweighted average approach. The weighting used is a product of two factors:■

Portfolio technology share (𝑊𝑊𝑖𝑖𝑇𝑇𝑇𝑇 ): This weighting is calculated by finding the fraction of production eachtechnology has within its sector in the portfolio aggregate in 5 years' time. This is used to gauge thetechnologies’ relative importance in the companies held by the portfolio.

■

Technology production change in NZE (𝑊𝑊𝑖𝑖𝑇𝑇𝑇𝑇 ): Within a sector, each technology makes a different relative

contribution to global emissions. Consequently, the use of some technologies (e.g., coal-fired power andrenewable energy) is more significant than others (e.g., oil-fired power) for meeting the NZE pathway. To
reflect this, polluting technologies are weighted based on their production in 2020 in the NZE, as theymust scale down from this amount. Meanwhile green technologies are weighted based on their target
production in 2030 in the NZE, as they must build up to this amount. The result is that in addition toweighting the individual technology alignments on the basis of portfolio exposure, the Sector Paris
Alignment Score also accurately captures the variable importance of different technologies to the global
energy transition.
Thus, the Sector Paris Alignment Score 𝐴𝐴𝑘𝑘𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 for sector 𝑘𝑘 is calculated as
𝐴𝐴𝑘𝑘𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 =∑𝑖𝑖 𝑊𝑊𝑖𝑖𝑇𝑇𝑇𝑇 ∙ 𝑊𝑊𝑖𝑖𝑇𝑇𝑇𝑇 ∙ 𝐴𝐴𝑡𝑡𝑡𝑡𝑡𝑡ℎ𝑖𝑖∑𝑗𝑗 𝑊𝑊𝑗𝑗𝑇𝑇𝑇𝑇 ∙ 𝑊𝑊𝑗𝑗𝑇𝑇𝑇𝑇with 𝑖𝑖 and 𝑗𝑗 indices for technologies within the given sector 𝑘𝑘 and the other variables defined as in the

aforementioned.

Portfolio Paris Alignment Scores
The calculation of the overall Portfolio Paris Alignment score from the Sector Paris Alignment scores closely
mirrors that of the Technology to Sector Paris Alignment calculation. The Portfolio PA score is a weighted
average of the Sector PA scores, with weightings reflecting portfolio value exposed to a given sector and thesector’s importance to the emissions transition. This represents a minor variation on the calculation used toaggregate to the sector level. The two factors in each weighting are:■Financial exposure to sector (𝑊𝑊𝑗𝑗𝑆𝑆𝑆𝑆 ): Unlike weighting different technologies within a sector, between

sectors there are entirely different production types (e.g., MW of capacity, tonnes of coal produced),which renders a weighting based on absolute production meaningless. As a proxy, the relative portfolio
value exposed to that sector is used. Note that in this calculation only those companies for which thesector at hand is the company’s primary sector of operations are counted, in order to avoid doublecounting, as well as to prevent highly valuable companies with negligible production in a sector fromskewing the weighting (e.g., Apple and Amazon have very small holdings in power generation assets).

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■

Sector emissions change in NZE (𝑊𝑊𝑗𝑗𝑆𝑆𝑆𝑆 ): Similar to the explanation above for technologies, different sectors

will need to make different relative contributions to global emissions or emissions reductions over the

coming decades. To reflect this, each sector is weighted based on the extent to which its emissions mustchange between 2020 and 2030 as outlined in the NZE.
Thus, the Portfolio Paris Alignment Score 𝐴𝐴𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 is calculated as
𝐴𝐴𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 =∑𝑘𝑘 𝑊𝑊𝑘𝑘𝑆𝑆𝑆𝑆 ∙ 𝑊𝑊𝑘𝑘𝑆𝑆𝑆𝑆 ∙ 𝐴𝐴𝑘𝑘𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠∑𝑙𝑙 𝑊𝑊𝑙𝑙 𝑆𝑆𝑆𝑆 ∙ 𝑊𝑊𝑙𝑙 𝑆𝑆𝑆𝑆

with 𝑘𝑘 and 𝑙𝑙 sector indices and the other variables defined as in the aforementioned.

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Stewardship Scoring
Stewardship, considered here as the combination of investor-company engagement processes andshareholder resolution activities, has become an increasingly important lever of change in the climate financespace. Alongside this, stewardship is a growing source of value in the marketing of investment products, asasset managers attempt to differentiate their offerings. Simultaneously, there has been a rise in investor
collaboration and strategic company targeting in company engagements on climate, primarily led by the
Climate Action 100+ (CA100+) initiative. The collaborative investor-company engagement initiative,
established in December 2017, has over 700 investor members with a collective $68 Tn under management.
The CA100+ process sets three key targets for the targeted 166 companies, representing the most climatecrucial listed corporations in the world: Governance of climate risks/opportunities,
 Reducing greenhouse gas emissions across value chains, consistent with limiting global average warming
to well below 2° C, and Providing enhanced disclosure aligned with the TCFD process.
The CA100+ initiative tracks indicators to measure the factors above, including emissions targets,decarbonisation strategy, capital allocation, lobbying on climate policy and board-level oversight of climate by
the company. Given the prominence of the CA100+ within the climate stewardship process, it is widely
expected that asset managers should demonstrate contact with these indicators in their corporate
stewardship processes. Despite the importance of investor-company stewardship, there is a substantial lack ofpublicly available, objective metrics to judge the quality of such practices, both generally and with respect toclimate issues. To address this issue, FinanceMap’s stewardship scoring was originally developed in 2018 using
key aspects of the UK Financial Reporting Council’s (FRC) 2020 Stewardship Code to assess the investorcompany stewardship process on climate.
Throughout this document, the term ‘stewardship’ is used to refer to all private and public investor
communications designed to influence the companies they hold shares in. This includes:

 Private communications and meetings with corporate management and appointed advisors,
 Questions at annual general meetings (AGM) or other company meetings,
 Comments on the company in the media or public forums, and Shareholder resolution measures and voting.
The methodology is designed so that particular parts of the stewardship process may be isolated andexamined in detail for any particular asset manager.

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Background
Since the development of FinanceMap’s original stewardship methodology in 2018, substantial progress has
been made on the minimum expectations for investors to be considered credible stewards of investee
companies on climate. This is demonstrated by the formation of various climate-related industry coalitions
releasing investor guidelines for climate stewardship. For example, the Net Zero Asset Managers Initiative(NZAMI) was launched in December 2020 and now has 291 signatories with collective $66 Tn assets undermanagement. NZAMI’s aim is to support the goal of net zero greenhouse gas emissions by 2050 or sooner, inline with global efforts to limit warming to 1.5°C, and to support investing aligned with net zero emissions by
2050 or sooner. Given these developments in the sector, FinanceMap updated its stewardship methodology inAugust 2022, using updated industry-standard guidelines as benchmarks for best practice expectations ofinvestors in 2022.
The below sections outline FinanceMap’s stewardship scoring system and updated benchmarks in detail.

Original Benchmarks
FinanceMap’s original methodology was developed in consultation with several of the world’s leading asset
managers, using key aspects of the UK Financial Reporting Council’s (FRC) 2020 Stewardship Code as abenchmark. The Stewardship Code was chosen to benchmark engagement quality as it provides an ambitious
framework and detailed definitions for what constitutes effective engagement. Additionally, the stewardshipscoring benchmarks referenced engagement principles outlined in the UN Principles for Responsible
Investment’s (UN PRI) Active Ownership 2.0 and CA100+ signatory commitments, while transparency
expectations were defined using the EU Directive 2017/828.

Updated Benchmarks
Since the January 2021 release of FinanceMap’s Asset Managers and Climate Change report, the following
documents have been released by recognized industry initiatives:●

Net Zero Asset Managers Initiative (NZAMI) Commitment (December 2020)●

Paris Aligned Investment Initiative (PAII) Net Zero Investment Framework (March 2021)●

Net Zero Asset Owner Alliance (NZAOA) Elevating Climate Diligence on Proxy Voting (April 2021)●

NZAOA Future of Investor Engagement (March 2022)●

Institutional Investors Group on Climate Change (IIGCC) Net Zero Stewardship Toolkit (March 2022)●

Global Standard for Responsible Climate Lobbying (March 2022)

These publications have been used as new benchmarks to update the scoring criteria of FinanceMap's
stewardship scoring methodology. Additional reference resources also include the NZAOA Target Setting
Protocol (first edition January 2021, and updated January 2022).

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In November 2022, the UK FRC published its Review of Stewardship Reporting, which states that starting from2023, signatories are expected to report in more detail on activities and outcomes relating to their “integrationof stewardship and investment, monitoring, engagement, collaborative engagement, escalation, and exercisingrights and responsibilities.” Notably, for Principles 4, and 7 to 12, the FRC expects multiple case studies toevidence the activities undertaken and the outcomes. Therefore, queries in FinanceMap’s methodology thatare benchmarked against these Principles will require multiple case studies to score highly.
New benchmarks will be applied to evidence published from 2021 and 2022 onwards for entities in the
stewardship scoring universe, depending on the guideline. New benchmarks will not be applied to evidence
that predates the publication date of the guidelines. For example, updated expectations of investors takenfrom the Global Standard for Responsible Climate Lobbying, released in March 2022, will only be applied toevidence published from March 2022 onwards.
Updates to FinanceMap’s stewardship methodology were sent to and reviewed by relevant stakeholders
including FinanceMap’s advisory group, responsible investment organizations, and institutional investor
groups.

Stewardship Assessment Methodology
This section outlines the key queries and data sources by which asset managers’ stewardship programs areassessed within a system devised by InfluenceMap in 2019, which breaks down the area being assessed into
sub-issues and data sources to generate a “matrix” structure. FinanceMap applies set criteria for the selectionof data sources. Firstly, FinanceMap aims to ensure as much comparable data as possible across organizations
to allow for fair scoring. Secondly, FinanceMap draws evidence from credible and public sources (directcompany disclosures or respected third-party sources).
To break down investor stewardship on climate into sub-issues, FinanceMap uses a series of twelve queries
that can be applied across all data sources, constructing a matrix of queries (Q1...Q12) against data sources(D1...D4) for each investor. All queries are then weighted against one another in a matrix system to arrive at a
final top-level score. Data sources are listed across the top horizontal row, in dark shading. This results in ascoring matrix, with sample scores (five-point scale of -2,-1,0,1,2) or NA (not applicable)/NS (not scored) in thesample matrix below.

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Data Sources
Engagement/Resolution Categories (Queries)

WeightingCompany

External

FinancialMediaof QueryDisclosures

Data

Disclosures

Reports

Sources1

Climate Engagement Framework
Assessing an asset manager’s framework to
inform its climate engagement strategy

9%

2

NS

NA

NS

2

Milestones for Success
Assessing if the asset manager uses a definedstructure for engagement and milestones tomeasure progress against

9%

1

NS

NA

NS

3

Escalation Strategy
Assessing escalation processes, when theasset manager has chosen to escalate
engagements, outcomes of escalation

10%

1

NS

NA

NS

4

Engagement on Paris Aligned Business
ModelsAssessing if the asset manager is engaging
companies around climate change,
particularly to transition business models inline with the Paris Agreement

10%

1

NS

NA

NS

5

Engagement on Climate Lobbying
Assessing if the asset manager is engaging
companies to align their climate policy
influence with the Paris Agreement

10%

1

NS

NA

NS

6

Climate Engagement Impact
Assessing if engagements with companies
have driven behavior change on climate

10%

1

NS

NA

2

7

Collaborative Engagement
Assessing if and how the asset manager has
participated in collaborative engagements totransition companies in line with the Paris
Agreement

6%

2

2

NA

1

8

Stewardship Governance and Processes
Assessing whether the asset manager has
effective governance structures andprocesses to support stewardship

6%

2

NS

NA

2

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9Engagement Transparency
Assessing if the asset manager is transparent
about who it engages with and on whatissues10

Resolutions: Voting Transparency
Assessing if the asset manager is transparent
about its voting record and its voting-related
governance structures

11

12

5%

2

NS

NS

NS

5%

1

NS

1

1

Resolutions: Climate-Relevant Voting
Assessing how the asset manager has voted
at company AGMs in support of the aims of
the Paris Agreement

10%

1

NS

NS

1

Use of Shareholder Authority
Assessing if the asset manager had used its
shareholder authority to influencecompanies to become Paris-Aligned

10%

2

NS

NS

NS

It is thus possible to score each sub-issue across the various data sources within the cells of the matrix. Piecesof evidence within each cell are assessed and scored by FinanceMap team members according to pre-set
criteria for each cell, so that each score is independent of the scorer, and is as objective and consistent as
possible. Evidence pieces are scored on a 5-point scale (-2; -1; 0; 1; 2), and tagged with date, region and otheruseful filters. Each cell, data source, and sub-issue is weighted by pre-set importance criteria.
An algorithm is applied across the matrix to result in sub-scores for each sub-issue and a total score for theentire matrix. If no evidence is found in a particular cell or the cell is not relevant to the entity being scored(noted as NS or NA), the weighting for that cell is allocated to other cells in the row where there are evidence
pieces and scores. Scored evidence in each cell is aggregated across the matrix structure using a range ofcarefully weighted algorithms. These calculations produce a top-line score for the overall performance of theasset manager’s stewardship program, the Organization Stewardship Score.

 Organization Stewardship Score (value of 0-100 and converted to letter grade from A+ to F-)
FinanceMap’s metric of a company’s stewardship of investee companies on climate. Above 85 (graded A)
indicates strong and consistent engagement to transition companies in line with the Paris Agreement.
Between 70 and 85 (graded B) suggests the asset manager is actively engaging companies to improve theirclimate performance, although the engagement is not sufficiently firm or clearly in line with the Paris
Agreement. Asset managers scored 50 to 65 (graded C) engage companies on climate but are not driving
clear behavior change e.g. around the companies’ business models. Below 50 (graded D to F) indicatesthat the asset manager does not appear to engage companies on climate.

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FinanceMap assesses asset management organizations at the financial group level, i.e. the top level of anentity representing numerous operating companies which in turn manage funds, e.g. BlackRock represents
BlackRock UK Ltd which manages iShares ETFs. In some cases, the brands and engagement activities ofoperating companies within financial groups are suitably different to warrant separate analysis. For example,
Allianz (the financial group) owns the asset manager Allianz Global Investors (Allianz GI), which manages
Allianz SE assets as well as other clients. In May 2000, Allianz acquired the subsidiary PIMCO, a fixed income
specialist with assets under management of US $1.74 trillion as of December 2022. As Allianz Global Investors
and PIMCO have sufficiently distinct investment strategies, and policies and behavior towards companies on
climate, FinanceMap analyzes each entity separately. Alongside entity analysis for each, Allianz’s financialgroup level score is also generated, on the basis of its group-level engagement policies, as well as Allianz
Global Investors’ and PIMCO’s stewardship scores.

Stewardship Assessment Queries
As outline above, FinanceMap assesses asset managers’ stewardship activities against a set of queries
representing key sub-issues of climate stewardship. The 12 queries are grouped into four pillars:(1) Stewardship Frameworks and Processes, (2) Climate Stewardship Actions, (3) Governance andTransparency, and (4) Shareholder Authority and Voting. The following section describes these queries andhow asset managers’ behavior is scored against them.

Stewardship Frameworks and Processes
Q1: Climate Engagement Framework
The UK’s 2020 Stewardship Code Principle 9 expects asset managers to explain “how they have selected andprioritized engagement” & “how they have developed well-informed and precise objectives for engagementwith examples”. NZAOA Future of Investor Engagement describes narrow, single company focused
engagements are “often insufficient to advance improvements at the sector and value-chain level” especiallyon topics that require addressing sector-wide or systemic problems. Therefore, for asset managers to scorehighest on this query, they should either have a clear strategy for engaging companies in all material climate
sectors or have clearly described how climate-related engagements are selected and prioritized, with multiple
climate sectors being addressed. For example, Legal and General’s Climate Impact Pledge offers one example
of best practice, as it outlines expectations for all material climate sectors, ensuring engagements are targeted
and logically consistent.
Q2: Milestones for SuccessPrinciple 9 of the UK Stewardship Code requires investors to disclose “how engagement has been used tomonitor the company; any action or change(s) made by the issuer(s) […] Examples should be balanced andinclude instances where the desired outcome has not been achieved or is yet to be achieved.” Asset managers
are assessed on whether engagements are monitored, including whether processes are in place to track
specific required outcomes to be achieved consecutively or at different points, as milestones or success criteria
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during the engagement. To score highly, asset managers should have a strong framework informing
engagement and key milestones to measure progress, with clear examples of how it has monitored
engagements or how it has developed precise objectives for engagements.
IIGCC’s Net Zero Stewardship Toolkit provides guidelines summarized in 6 key steps by which investors canenhance their stewardship practices to deliver the rapid acceleration in decarbonization needed to achieve net
zero by 2050 or sooner. Given the document was published in March 2022, FinanceMap will integrate these
expectations as of the 2023 reporting cycle to give asset managers time to incorporate these guidelines into
their reporting and processes. However, asset managers who have already implemented elements of thisframework will be scored positively such as Sarasin’s Net Zero Action Plan, which assesses companies that arealigned with a net zero pathway and companies that have potential to align.
Q3: Escalation Strategy
The Stewardship Code, Principle 11, states that “Signatories, where necessary, escalate stewardship activities
to influence issuers [… and explain] how they have selected and prioritized issues, and developed wellinformed objectives for escalation; when they have chosen to escalate their engagement, including the issue(s)and the reasons for their chosen approach, using examples”. Consistent with the Stewardship Code, highlyscored asset managers should have in place escalation strategies and responses that are deployed in certain
situations. When asset managers encounter sufficient disagreement or a lack of progress on engagement, it isessential they have a robust escalation strategy in place to prevent the engagement process from stalling.
Escalation actions are key in enabling asset managers to be ‘forceful stewards,’ without which engagement is
an advisory conversation without consequences. Trillium Asset Management, for example, have demonstrated
a track record of escalating climate engagements by filing or co-filing climate-related shareholder resolutions.
FinanceMap’s methodology does not prescribe a certain response as necessary, nor pass judgment on which
type of response is better than another, so long as the response constitutes a meaningful penalty. Simply‘increasing engagement intensity’, for example, is considered insufficient.

Climate Stewardship Actions
Q4: Engagement on Paris Aligned Business Models
FinanceMap assesses whether asset managers are engaging companies to transition in line with the Paris
Agreement. Climate change already tends to be the primary focus of ESG-related engagements. However, themethodology assesses the extent to which the intent and desired outcomes of engagements are consistent
with the IPCC’s Special Report on 1.5°C and the Paris Agreement’s commitment to limit warming to “wellbelow” 2°C this century.
NZAOA’s Future of Investor Engagement states “sector/value chain engagement can help investors andcompanies focus on real-world decarbonization solutions that require sector-wide action” which can help drive
accountability that is not always possible in single company engagements. Therefore, for asset managers toscore highly on this query, they should be engaging across companies and material sectors to transition their
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business models to align with 1.5°C. For example, Robeco’s Net-Zero Carbon Emissions engagement theme
focuses on the decarbonization journeys for four key sectors: oil and gas, electric utilities, steel, and cement
and engagement will be based on the CA100+ Net-Zero Company Benchmark framework.
Q5: Engagement on Climate Lobbying
As InfluenceMap has demonstrated through consistent analysis since 2015, corporations remain a primaryobstacle to the progress of climate change legislation. Investors have a key role in bringing about corporate
behavior change to ensure companies’ direct and indirect policy footprints are consistent with the ambition of
the Paris Agreement. Asset owners such as the Church of England Pension Board and Sweden’s AP7 have led
an engagement process requesting that companies publicly audit their influence over climate policy. This typeof activity, or, for example, engagements to prevent a company opposing specific legislative strands, would
receive the highest score.
In March 2022, the Global Standard for Responsible Climate Lobbying was released to provide a “framework toensure companies’ lobbying and political engagement activities are in line with the goal of limiting global
temperature rise to 1.5°C above pre-industrial levels”. The 14-point Standard, which has been outlined in 4
sections: policy and commitment, governance, action, and specific disclosures, has been applied as additional
benchmarks for this query. Asset mangers engaging on the ‘action’ standards will score highly, this can include
engaging with companies to publish a detailed annual review of its direct and indirect climate lobbying
activities and take action to address misalignments in its direct and indirect lobbying activities.
Q6: Climate Engagement Impact
This query aims to determine the extent to which there has been some impact or materiality as a consequenceof asset managers’ engagements. For instance, asset managers would score highly if they have individually orcollectively showed sustained and serious attempt to change company behavior through engagements orengaging to drive change at the sector level. All asset managers that are observably active within the Climate
Action 100+ engagement initiative would be scored positively for the success of program as a whole. However,to receive the maximum score there must be evidence of causality or additionality specifically related to theengagement: in other words, evidence that the investor drove a particular outcome. This would include being
the lead or co-lead filer of a resolution that appears to have caused the intended change. An investor assigned
as the lead engager on a CA100+ company that has materially changed its behavior would also receive fullpoints.
Q7: Collaborative Engagement
Principle 10 of the Stewardship Code states that “Signatories, where necessary, participate in collaborative
engagement to influence issuers.” Collaborative investor engagement around climate has become increasingly
common and important in recent years. The CA100+ coalition, for example, represents 700 investors with US$68Tn assets under management, and over a five-year time-period intends to transition 166 of the mostsignificant companies on climate. To score highly on this query, asset managers must be material contributors

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to collective engagement efforts to transition companies in line with the Paris Agreement. For example,
Federated Hermes, which is a significant supporter of CA100+ and leads or co-leads engagements with over 25
companies, would score highly on this query. Accepting that not all asset managers have the resources orauthority to lead collaborative engagements, our scoring will assess whether there has been a material
contribution to the collaboration and/or specific engagements.

Governance and Transparency
Q8: Stewardship Governance and Processes
This query combines expectations of the Stewardship Code’s Principles 2, 5, and 6. Principle 2 expects asset
managers to explain “how their governance structures and processes have enabled oversight andaccountability for effective stewardship” and “how they have appropriately resourced stewardship activities”.
Principle 5 states signatories should explain “how they have reviewed their policies to ensure they enableeffective stewardship”. Lastly, Principle 6 highlights expectations around taking “account of client andbeneficiary needs” and communicating “the activities and outcomes of their stewardship and investment tothem”. For asset managers to score highly on this query, they should clearly describe stewardship governancestructures and processes, how they assess the effectiveness of its stewardship-related policies and activities,
and how they have sought beneficiaries’/clients’ views in their stewardship approach and how this is reflectedin the approach.
Q9: Engagement Transparency
According to EU Directive 2017/828, "institutional investors and asset managers should […] be moretransparent as regards their approach to shareholder engagement.” For an asset manager to be considered
fully transparent within the FinanceMap scoring system, the manager should, for instance, publish thecompanies they are engaging with, alongside an explanation of the issues discussed and the outcomes sought.
An equally high transparency score could be obtained by providing detailed case studies of engagements withspecific (named) companies across the areas being engaged on. There is no expectation that every
engagement merits a case study, as this would be excessive. All disclosures should be freely available oncompany websites and presented in an accessible format.
Q10: Voting Transparency and Governance
The UK’s 2020 Stewardship Code Principle 12, states that, for listed equity assets, investors should “provide alink to their voting records, including votes withheld if applicable; explain their rationale for some or all voting
decisions, particularly where: there was a vote against the board; there were votes against shareholder
resolutions; a vote was withheld; the vote was not in line with voting policy.” Additional governance criteria
on how voting decisions are made draws from NZAOA’s Elevating Climate Diligence on Proxy Voting
Approaches which states “an asset manager’s Climate Voting approach should include a clear organizational
structure and delegation of roles and responsibilities”. Therefore, the highest scores are given to asset
managers who publish their voting records annually (or more frequently) along with voting rationale (in linewith the Stewardship Code) and describe their organizational structure, roles, and responsibilities for making
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proxy voting decisions. Robeco, for example, has disclosed all proxy voting data along with votes against
management on its website. Additionally, its Proxy Season Overview provides an overview of key votes
including shareholder proposals and describes how its voting team assesses Say-on-Climate Proposals.

Shareholder Authority and Voting
Q11: Climate-Relevant Voting
Annually, FinanceMap identifies shareholder resolutions deemed to be climate relevant, and asset manager
vote support for these resolutions is recorded. The climate relevance categorization of a resolution is based on
the type of company at which the resolution is raised, as well as potential outcomes of the resolution itself.
Companies considered must either be a focus company of the CA100+, a large conglomerate, or be active inhigh emissions sectors. Smaller companies are not included due to the comparative impact of a the resolution
passing. The types of resolutions considered must either reference the Paris Agreement or clearly describe an
outcome which would be Paris aligned. For example, a resolution regarding a bank's cessation of coal financing
would be a Paris-aligned outcome without needing to directly reference the agreement. Resolutions where
any climate impact would be indirect or unclear are not scored. Overly prescriptive resolutions are also notincluded, for example, resolutions demanding unrealistic outcomes such as the end of all current businessactivities.
To ensure this assessment is consistent across asset managers, only non-management backed resolutions are
considered. This is due to management backed resolutions generally generating considerably higher support
percentages compared to non-management backed resolutions.
The full list of resolutions assessed can be found here. Voting outcome data is drawn from the Insightia voting
data platform. Given the significance of proxy voting in the stewardship process, this methodology is designed
so that an asset manager’s climate voting record is incorporated into its engagement organization score, but
can also be isolated and examined in detail. On FinanceMap.org, an asset manager’s stewardship score ispresented alongside its percentage voting support for climate-relevant resolutions in the most recent fullcalendar year.
Q12: Use of Shareholder Authority
Owners of corporate equity have significant legal and statutory powers to influence company behavior.
FinanceMap assesses whether asset managers have, in their use of shareholder authority, been ambitious,
purposeful and forceful in driving companies toward Paris Alignment. Investors that score highly may, forinstance, have filed or co-filed shareholder resolutions. In 2021, for example, Zevin Asset Management
filed/co-filed five climate-related shareholder resolutions.
Asset managers may also score highly through galvanizing investor support for a climate resolution either
individually or as part of a coalition, or other public forms of shareholder activism. Examples where asset
managers have issued public statements around their voting intentions at company AGMs, engaged withFinanceMap Asset Management Methodology, April 2023

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company board ahead of AGMs about climate concerns or resolutions, or made statements/asked a climaterelated question at company AGMs would score positively. For example, BNP Paribbas Asset Management will
abstain votes on the financial statements of companies that do not disclose Scope 1 and 2 emissions and if thecompany is unwilling to engage on transitioning its business model to the Paris Agreement. Additionally,
Sarasin and Partners has an ongoing campaign focused on voting against the statement of accounts, voting
against the re-nomination of auditors, and targeting specific relevant director nominations at companies thatare not considering climate risk effectively.

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Policy Engagement
To assess financial institutions’ engagement with sustainable finance policy processes, InfluenceMap applies
the existing LobbyMap methodology for assessing climate policy engagement. Please refer to the LobbyMap
Methodology for an in-depth explanation of this assessment.

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