INSIDE NEW ZEALAND’S FIRST CLIMATE COLLABORATIVE ENGAGEMENT

A Q&A with Milford Asset Management and Pathfinder Asset Management

New Zealand’s first domestic climate-focused collaborative engagement is now underway, led by Milford and Pathfinder and facilitated by the Investor Group on Climate Change (IGCC) and supported by the Aotearoa New Zealand Stewardship Code. We spoke with Grace O’Hanlon (Milford) and Alex Safran (Pathfinder) about why they chose to lead company engagements via the initiative, what they’re seeing in early conversations with companies, and how collaboration is helping to accelerate stewardship capability across the market.

Why launch a collaborative engagement in New Zealand—and take a lead role?

Both firms described a strong interest in contributing to the IGCC-led engagement initiative, having observed the success of similar international initiatives.

For Pathfinder, stepping into a lead role was also about stretching their capability:

“Part of Pathfinder’s purpose is to make change and lead bravely. We’ve always believed in stepping into challenging spaces, because that’s how we grow capability and create impact. Taking a lead role in the collaborative engagement was a natural extension of that, aligning our purpose with our investing to support better climate outcomes for the wider community.” - AS

For Milford, the decision linked back to its origins as an engaged, hands-on owner:

“Active ownership has been part of the Milford DNA for two decades. Our purpose is to generate and safeguard long-term, risk-adjusted returns for our clients. We believe engaging with companies we own to address climate-related risk is part of our fiduciary duty. As such, we have built a capable team over a number of years to advance our stewardship approach. We felt we could bring that experience and resource to the wider group and help snowball the impact of engagement in New Zealand.” - GO

Why should more investors participate?

Both firms noted that collaborative engagement amplifies investor influence and gives companies a clearer signal of expectations:

“There’s only so much a single investor can do - whether in resourcing, expertise, weight of voice or the value of a holding in a company. When you come together as a group, it increases the voice you can have in advocating for positive change at a company.” - AS

They also highlighted a practical benefit particularly relevant in New Zealand: resourcing. Most local investment teams are small, and engagement can be time-intensive. Collaborative engagement helps spread the workload, allows investors to pool research and sector knowledge, and reduces duplication - meaning smaller firms can participate meaningfully without needing dedicated stewardship teams.

Alex summarised the dynamic simply:

“Pooling resources, skills, and perspectives makes engagement more effective and more efficient.”

How the engagement was designed

IGCC proposed a pilot in New Zealand, identifying the transport sector - based on the national emissions inventory - as a priority. Four companies were shortlisted. Milford and Pathfinder selected Auckland International Airport and Freightways respectively, based on holdings, capability alignment, investor interest, and the size of these companies’ carbon footprints.

Roles then evolved iteratively. Lead investors undertook the bulk of analysis and coordination initially, before allocating specific focus areas across the supporting investor group as familiarity and confidence grew.

A major practical challenge was reconciling different investor priorities - targets vs strategy, timing, remuneration alignment and disclosure expectations. Over time the group moved toward a shared set of objectives tailored to each company.

What climate issues are being prioritised?

Both leads were clear that priorities differ by company and sector, and require detailed analysis. But some themes are consistent:

·      Focusing on controllable and actionable steps, especially those with a clear commercial rationale.

·      Setting realistic interim targets and ensuring they are reflected in executive remuneration.

·      Improving meaningful disclosure.

·      Addressing material emissions drivers, not symbolic actions.

In Freightways’ case, the engagement centred on the Scope 3 emissions of the company’s contractor fleet, a major part of its footprint. Alex noted that the apparent emissions “increase” in 2024 was driven by improved data collection - a nuance investors were able to clarify directly through engagement.

For Auckland Airport, Milford emphasised the importance of understanding and communicating climate adaptation risks, particularly given the company’s exposure to sea-level and storm-water impacts.

What have the early conversations with companies been like?

Engagements have been constructive and candid, though not without early challenges.

Auckland Airport was initially wary - something the leads attribute to insufficient early communication about the purpose of the collaborative format. Once the objectives were clarified, the dialogue became far more open:

“They really appreciated the ability to talk through challenges informally, in a way you can’t in formal disclosures.” - GO

Freightways was receptive from the outset, but asked for time until their 2024 reporting cycle was complete. The result was a substantial uplift:

“When the report came out it was night and day compared to last year. Almost all of the issues we planned to raise had been addressed or were already in progress. Freightways had clearly done the groundwork themselves: improving data, building capability, and treating climate as a business issue rather than a disclosure exercise. That meant our conversation could shift quickly from identifying gaps to focusing on progress and opportunity.” - AS

What companies are finding valuable

Both firms said the companies valued:

1. Efficiency:
One meeting instead of ten separate investor meetings. This removes contradictory messages and reduces the burden on stretched sustainability teams.

2. Clarity on materiality:
Investors could explain what really matters and what doesn’t.

“Some companies spend pages on symbolic initiatives. We could say: this isn’t material, focus your effort here instead.” - GO

3. Direct, immediate feedback:
Companies received clear, timely views on strengths, weaknesses, and disclosure gaps.

4. Confidence:
Where companies are making genuine progress, collaborative engagement validates and reinforces that effort.

What collaboration enables that individual engagement can’t

This theme came through strongly:

·      Amplified influence: Smaller managers with deep knowledge can combine with larger managers with larger stakes.

·      Shared resource: Even for large firms like Milford, engagement capacity is finite. Collaboration pools research, sector expertise, and analytical effort.

·      Accelerated learning: Newer or smaller investors can rapidly build capability by watching experienced peers engage.

·      Better outcomes: Unified messages give companies clarity and avoid investors inadvertently sending mixed signals.

The leads summarised the value clearly:

“In New Zealand most investors have big hearts and big brains but small voices. Collaboration lets you amplify that voice and have real influence.” - AS

“A problem shared is a problem halved - or a problem one-tenth’ed depending on how many investors are in the room.” - GO

Where does this go next?

In 2026 the focus will shift to:

·      Disclosure improvements in next year’s reporting cycle (the main near-term marker of success).

·      Tracking progress on longer-dated initiatives and pilots, particularly around Scope 3 decarbonisation.

·      Continued refinement of escalation triggers and expectations.

What this says about stewardship in New Zealand

Both leads consider this engagement a sign of a market quickly maturing:

“We’re growing up - and growing up fast. Everyone has the same enthusiasm, but we’re at different stages. Collaborating accelerates the whole ecosystem.” - GO

“New Zealand is in its infancy on stewardship, but initiatives like this show real momentum. The key now is not losing that momentum.” - AS

Final reflections for NZ investors

Both firms encourage more local investors to participate:

“Political cycles are short, but business cycles are long. Climate and nature risks don’t reset every three years, and companies know their long-term success depends on addressing them. That’s why investors have a role in ensuring these issues are treated not as compliance exercises, but as core business priorities, regardless of who sits in government.” - AS

“Collaborative engagement helps fulfil your fiduciary duty by ensuring companies address systemic climate risk. It amplifies your influence, lifts your capability, and clearly signals to companies that their stakeholders want to see sustained improvement over the long term.” - GO

Every collaborative engagement lifts not only company performance but investor capability, creating a shared learning environment that strengthens stewardship across the entire market.

If you have questions about the initiative or wish to get involved, reach out to Richard Proudlove, IGCC’s Corporate Engagement Director (richard.proudlove@igcc.org.au).