Engagement at TwentyFour

Issue

We contacted Pension Insurance Corporation (PIC) investor relations following Athora’s acquisition announcement to understand the potential impact on PIC’s net-zero commitments and future Science Based Targets initiative (SBTi) validation.

Response

PIC indicated that it does not currently expect changes to its sustainability commitments following the acquisition. Management noted that PIC and Athora are “similarly aligned around sustainability,” although the company is still working through the full side-by-side review at this stage. The response therefore suggests that PIC’s net-zero targets and interim milestones are expected to remain broadly unchanged, but final confirmation is still pending completion of the transaction review.

Action

Constructive engagement. The response is reassuring in that PIC does not expect a change in sustainability direction under Athora ownership, but the answer remains preliminary. Continue to monitor formal post-acquisition disclosures, any update to PIC’s net-zero roadmap, and whether SBTi validation remains part of the group’s sustainability framework.

Issue

We engaged with the Aegon European CLO team to review our credit assessment of the CLO platform.

Response

Following a clear underperformance in the management of CLOs that are past the reinvestment period, we conducted an on-site due diligence review in London during the quarter, involving several analysts and the portfolio manager.
 

We discussed the strategy for managing par in CLOs post-reinvestment, including active trading and the approach to ultimate recovery regarding the loans backing the CLOs. This is a well-established manager with a strong track record; however, it was apparent to us that, although there is a clear commitment to protecting debt holders, there has been weaker performance relative to peers due to a limited activity in the CLO. This is especially true where assets are underperforming. We relayed that we would encourage them to hire a dedicated trader to facilitate a more active trading style.
 

Action

This was a useful engagement in confirming our thesis regarding the platform's performance challenges. We will closely monitor performance and maintain frequent engagement with the portfolio manager. We do not expect a principal loss on our investment; however, we will reduce exposure naturally through resets to manage risk within our investment portfolios. 

Issue

We attended GM's investor call to get an update on its net-zero pledge in light of the recent electric vehicle (EV) rollback.

Response

GM confirmed that despite the EV rollout pullback, it remains the leading US auto company on net zero, with a continued commitment to an eventual all-electric lineup. Its emissions strategy still targets carbon neutrality across global products and operations by 2040, anchored on eliminating tailpipe emissions from new US light-duty vehicles by 2035. Fully electric vehicles remain the long-term endgame, but GM is adapting to market demand and the current regulatory environment by planning a return to plug-in hybrids, targeted for US launch around 2027, with the technology already in production in China. Management made clear this shift is market and regulation-driven, pointing specifically to the expiration of the $7,500 federal EV consumer tax credit, which drove a sharp drop in EV sales in Q4 2025, rather than a change in the company's own strategic intent. 

The company confirmed the pivot has been costly, citing a $6bn writedown to unwind certain EV investments on top of a prior $1.6bn charge tied to earlier changes in the rollout schedule. Notably, management stated they do not regret the original all-in EV strategy, framing the hybrid reintroduction as capital discipline in response to the current environment rather than a retreat from the long-term electrification thesis. As it currently stands, GM has no hybrid on sale in the US (only the Corvette E-Ray), with plug-in hybrid electric vehicles (PHEVs) sold only in China for now.

Action

Constructive engagement. The near-term hybrid pivot is a pragmatic, regulation and cost-driven response rather than a retreat from the 2035/2040 targets, and management's framing supports the view that GM's long-term net-zero commitment is intact. Continue to monitor the 2027 US PHEV launch timeline, further slippage in electrification targets, and any additional writedowns.

Issue

We engaged with the company to understand whether its net-zero targets would remain in place following the purchase of Calpine, an energy generation business with significant exposure to gas generation.

Response

While we view the underlying business fundamentals positively, we sought confirmation that existing net-zero targets, including CEG's goal of 100% carbon-free generation by 2040, would continue to apply following the material Calpine acquisition. The deal, completed in January 2026 for around $16.4bn equity value (around $22bn total consideration), adds roughly 28 gigawatts (GWs) of largely gas and geothermal capacity to Constellation's existing near 32GW fleet, which was previously anchored by nuclear (around 68% of 2025 output). Calpine is America's largest generator of electricity from natural gas and geothermal resources, and the combined entity's generation mix will shift materially, with gas now representing a much larger share of installed capacity than pre-deal, even though the combined fleet is still framed as majority zero or low emission on a capacity basis.

Management was unable to confirm whether net-zero targets set before the deal would remain, and that they were currently under review. When pressed for more detail, the company could not provide a concrete answer. It's also worth noting third-party commentary has suggested the digital economy/data center demand boom has extended the expected asset life of Calpine's gas fleet well into the 2040s, which may create tension with any unchanged decarbonisation timeline.
 

Action

Given this uncertainty, we will not add the position across our sustainable mandates. We remain unsure whether the Calpine acquisition marks a departure from CEG's net-zero targets and a broader shift in the business’ approach to sustainability, particularly given the scale of gas capacity now added to the platform. Continue to monitor for: (i) clarity on whether the 2040 carbon-free target is reaffirmed, revised, or diluted; (ii) any updated timeline from management; and (iii) how the combined entity's generation mix disclosure evolves post-integration. Revisit mandate eligibility once a firmer position is provided.