Catherine Howarth - Share Action
Promoting responsible investment across Europe
With Catherine Howarth OBE the CEO of ShareAction
In this episode
We adventure with Catherine Howarth who has been pioneering systems change for over a decade with ShareAction. ShareAction coordinates civil society activism to promote responsible investment across Europe. We explore the critical role that finance, pension funds, asset managers and big banks have in transitioning to a low-carbon future and that there is no space in our carbon budget for further investment in fossil fuels.
Catherine talks about their formula for successful campaigning, the need for us to be a movement for change and influence our pension funds, how that can happen, and a vision for a sustainable financial system that serves society instead of being so self-serving.
🎗️ You can support the work that ShareAction does by visiting https://shareaction.org/
Keywords
Civil Activism, Collaboration, Governance, Living Wage, Pensions, Responsible Finance, Systems change
What will you discover
- 01:48 - Catherine Howarth and her role at ShareAction
- 04:28 - The role of banks and pension funds in the transition to clean energy
- 08:17 - Case study: transforming Lloyd’s Bank through banking ranking
- 10:30 - Case study: how ‘shareholder activism’ made Barclays and HSBC commit to a living wage
- 14:35 - Balancing hard work and recharging as a changemaker
- 21:37 - Vision for the future: diverse and inclusive finance leaders at every level
- 24:45 - Learning from the suffragette movement about creating systemic change
- 26:49 - Collaboration and generosity are critical in movements
- 31:20 - Changing the fiduciary duty: why and what’s the blocker
- 36:59 - Whom do we need to call in to change the laws and regulations
- 45:24 - Fixing the UK financial system will be felt across the globe
Catherine's vision for the future
Catherine's vision for a future is one where at every level we have a diverse and inclusive financial system and sector that benefits the planet and all people over profits.
Share Action is acting to transform the financial sector and the financial system because it's such a powerful system for shaping the future. Every investment decision is a bet on the future.
How do we get there
☀️ Banks need to pivot funding from fossil fuels
The role of banks in financing fossil fuels is problematic, and with the carbon budget already blown, there is no room for further funding towards this industry. A massive influx of finance and capital is crucial to facilitate a transition to low-carbon solutions. Banks hold significant power to pivot towards green financing, making them an essential player in the creation of a sustainable future.
What is the formula for transformation?
📈 Rankings create a race to transform
To initiate shareholder activism, a typical campaign begins by publicly ranking institutions based on their environmental and social performance, creating a competition to improve and rank higher. The banking ranking is then presented to shareholders, pensioners, and other stakeholders, to start what Catherine calls “shareholder activism”. Encouraging them to take action and hold institutions accountable for their impact on the environment and society.
🧰 Toolkits help shareholders to action
Shareholders are empowered with a toolkit that educates them on their right to vote on decisions and communicate directly with the board. They have the right to attend annual general meetings and engage with the board, as well as file a shareholder proposal for voting. This gives shareholders a voice and an opportunity to have a say in the decision-making process.
👉 If you are an individual shareholder, you can find out more about this toolkit here.
Case Study: Lloyd’s Bank Competing for ESG Performance
The first time Share Action did the banking ranking, Lloyds Bank came near the bottom of the ranking. Somebody in Lloyds used the report for two solid years to get the business to completely change everything they do. The next time ShareAction ranked them, they came second from the top. So it was just really nice. What I love is when our work is useful to the change makers on the inside of companies
We also need to change the legal duties of pension funds
🕵🏽 What is the problem
At the moment, if you put money from your paycheck into a pension scheme, which millions and millions of people do, the people who run that pension scheme have obligations to act in your best interest. The status quo for that is defined purely as maximising the investment returns that they get for you. So the focus is on profit.
That's all they're legally meant to focus on…it's your money they're investing, in ways that actually could undermine your future quality of life and your future security. When you think what a pension is there to do is a bit crazy. They can invest it in companies that sell deeply unhealthy food, they can invest it in companies that are destroying the climate through dirty energy.
📚 We need to change the law
We need to get that law changed so that the people look after your money, and still have to act in your interest, but they're allowed to weigh financial return against negative impact and also pro-positive impact.
That would be transformational in terms of the legal underpinning of our financial system. And when we achieve it, then so much else will flow.
It has a technical piece and it has a really simple message, which is they're looking after your money. Let's make them do it in a way that's really good for the planet and people and for you, and isn't just fixated on profit maximisation in a way that doesn't even make sense, isn't even smart.
When we fix this, we can influence economies where our pension money is invested in, all across the world. We can also collaborate with other people in countries like Australia and the USA who are working on similar projects.
⁉️ How can we do that?
We need to make this case to the public at large, we need a movement all over the country. This needs to be in the manifestos, we need to get people in every constituency excited about this idea. Have them bring it to their parliamentary candidates and get the major parties to sign up to it.
📣 What do we need to call in?
The need to enlist the support of politicians, decision-makers, influential individuals and grassroots organisations to alter the legal obligations of pension funds and turn this into a campaign that resonates with the public. We need to find champions in local councils, and organisations that have good strategic relationships with local councils, community groups and campaigners, and people who can influence local councils.
We also talked about
🌍 Repairing the UK financial system will reverberate worldwide
The impact of repairing the UK finance system reverberates worldwide, given the global investment of pension funds and the role of London as a financial hub. To amplify this effect, it's vital to foster support and collaboration with similar movements in other financial centres like the US and Australia.
The need for greater diversity and inclusivity in our governance
As it stands, a small and unrepresented group of elites hold onto power and shape the future in their interest, guided by their fiduciary duty. To accelerate positive change, the finance system should be diverse and inclusive at every level so that every decision being made represents the best and long-term interest of the society at large.
👉 Read ShareActions Workforce Disclosure Initiative Report and what this means for investors
💞 As a movement, we need to stop competing and collaborate
There is quite a bit of competition and not in a good way within civil society, within the kind of sustainability, and social movements. There is competition for funding and airtime within sustainability and social movements, which slows down the systemic change we are trying to create. The emphasis must be on the importance of collaboration and co-ownership of solutions. We don't need to build the entire movement from scratch, we need to create bonds and relationships with already self-organised groups that are broadly aligned.
🏆 Small wins create hope…and momentum
Small wins, not just wins at the kind of organisational level and winning this campaign, but wins in which people feel they were part of something and they learnt something and they stretched themselves and they were amazed by their own leadership at that moment. Those things are really hope-building and then they lock you into the possibility of even bigger and more systemic change.
🗯️ Stories unlock the perceptions of people in the present
The suffragettes inspire Catherine to believe that positive change can be achieved by chipping away at the old ways of doing things. We can start with changing the laws and regulations about institutional investors’ legal obligation to focus on maximising returns regardless of negative impact on future quality and security of life.
🤹🏼♀️ Be in the moment, know when enough is enough
Working in sustainability to create systemic change at that–takes a lot of persistence, courage and great effort. But it also gives the feeling that the list of things that needs to happen is endless. This can affect the way we balance our roles and the need to recharge and enjoy the world that we are trying to preserve.
🏕️ Rest enables the resilience we need to keep going
There is a need for resilience and persistence, balance, community and recharging in the process of creating positive change. Catherine takes a whole month in the summer to spend a lovely chunk of time with her boys in the mountains of Scotland. The time spent away from work helps her make better decisions and prioritise more effectively.
Who is Catherine Howarth
Since 2008, Catherine has been the Chief Executive of ShareAction, an organisation that coordinates civil society activism to promote responsible investment across Europe.
In addition to her role at ShareAction, Catherine is a board member of the Scott Trust and serves on the HM Treasury’s Asset Management Taskforce.
She also holds a First Class BA in Modern History from Oxford University and an MSc in Industrial Relations from the London School of Economics.
Catherine's expertise in corporate governance has not gone unnoticed, as she was named a 'Rising Star of Corporate Governance' by Yale University's Millstein Center in 2011, and recognised by the World Economic Forum as a Young Global Leader in 2014.
When Catherine finds the time for herself, she loves heading up to Scotland to spend some time in the mountains and by the sea. Of course, her two boys keep her occupied at home, but she still manages to sneak in some runs around the East End of London when she can.
Listen to 10:30 of the episode to discover Catherine’s origin story.
✊🏽⚡️Take Action
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✚ Living Wage Investor Toolkit 👉🏽 view here
A toolkit by the Share Action and the Living Wage Foundation to guide responsible investors to invest in accredited Living Wage Employers.
🤓 Discover more
👉 Ranking 77 of the world's largest asset managers approaches to responsible investment > link here