New framework to help Brunel Pension Partnership reach net zero

This rolling stream details the latest net-zero commitments from Brunel Pension Partnership, Abris Capital Partners and Citi

This is a rolling steam of company updates and announcements on their ambitions and plans to mitigate climate change and support the transition to a more sustainable economy

Brunel Pension Partnership uses new framework to reach climate goals

11 March 2021

Brunel Pension Partnership has said it will use the Net Zero Investor Framework (NZIF) to help it reach a new target of being net zero by 2050.

The NZIF provides investors with tools to be Paris-aligned. Some 33 of its signatories, representing more than $8.5trn, are already putting the framework to practical use.

David Vickers (pictured), CIO at Brunel Pension Partnership, said: “We have fully committed to a 50% reduction in our emissions by 2030 and to net zero by 2050. This framework provides determined investors with the roadmap they need to address climate issues across their portfolios. For Brunel, our focus now turns to building net-zero portfolios in partnership with clients who share our climate ambitions.”

Commenting on Brunel Pension Partnership’s net-zero commitment, Tony Burdon, CEO at Make My Money Matter, said: “Brunel’s announcement is another excellent example of how local government pension schemes can lead the way on tackling climate change. The voices of these quiet superheroes are getting louder and louder every day in the fight to make our money matter.

“In committing to not only transition to net zero by 2050, but halve emissions by 2030, Brunel will leverage their substantial £30bn AUM to help slow the pace of global warming, and set the standard for other schemes to follow. Ahead of COP26 in Glasgow, we want all major UK schemes to commit to net zero by 2050. In doing so, we can show how the UK’s pensions industry – and especially our local government schemes – can lead the world on creating a green financial system.”

Abris Capital Partners brings net zero to private equity

9 March 2021

European private equity investors Abris Capital Partners has committed to achieving a carbon neutral portfolio by 2025.

The commitment forms part of its new ESG strategy, which encompasses 17 initiatives across governance and culture, standards, education, and carbon neutrality. It puts in place net-zero action plans for each individual portfolio company.

The firm said “to ensure the programme is focused mostly on real reductions rather than offsets, over the course of each year Abris will invest in further emission-reduction projects, meaning each individual company will be able to reach net zero within an ambitious but realistic timeframe”.

Abris has asked each of its portfolio companies to adapt their strategies and operating models to climate change, which, for some businesses, it said, may have destabilising effects.

Citi’s Fraser announces net-zero commitments on first day as CEO

1 March 2021

Global bank Citi has committed to net-zero greenhouse gas emissions by 2050 in a move new CEO Jane Fraser said she was “proud to make” in her first day in the role.

“Net zero means rethinking our business and helping our clients rethink theirs,” she said. “I am proud to make this commitment on my first day as CEO of Citi.”

The firm commits to:

  • Publishing an initial net zero by 2050 plan within the next year, which includes emissions reduction targets for carbon-intensive sectors that also have low-carbon transition opportunities, including interim emissions targets for 2030 for energy and power portfolios.
  • Report on its progress.
  • Reviewing the scope of the plan to assess which additional sectors to include and how best to incorporate additional areas of business in a way that achieves meaningful emissions reductions in the real economy as part of a just transition.
  • Targeting net zero greenhouse gas emissions in business operations by 2030.

Jupiter commits its £55.7bn investment range to net zero

23 February 2021

Jupiter Fund Management commits is full range of £55.7bn investments and operations to net zero by 2050. It said its roadmap, including 2030 targets, will be published this year.

CEO Andrew Formica, said it “imperative that we work together as a company, an industry, and a society to tackle climate change”.

Jupiter has also aligned with the UN Global Compact on its strategy, purpose and principles; become a member of the Good Work Coalition, encouraging all investee companies to pay a living wage to their employees; and partnered with Forest Carbon, a not-for-profit scheme providing woodland carbon capture projects in the UK.

Formica added: “The transition to net zero carbon emissions is imperative but improving wider societal and governance standards is also crucial. Along with net-zero commitments, initiatives that align with the wider sustainability agenda, such as the UNGC principles and Good Work Coalition, will result in long-term gains for all stakeholders.”

Core investments of CBRE Global Investors to be net zero by 2040

18 February 2021

The directly managed, long-term core investments of CBRE Global Investors will be net zero by 2040.

The firm’s sustainability commitments include:

  • Long-term core strategies: improve operational efficiency of assets and source green energy suppliers.
  • Enhanced-return strategies: minimise embodied carbon by preserving existing structures and carefully selecting new materials, using a whole lifecycle assessment to create energy-efficient, future-ready assets.
  • Occupied office space: work to reduce carbon in line with Science Based Targets initiative criteria by 2035.
  • Tenant-controlled spaces (and others where the firm does not have direct control or management discretion): encourage clients, tenants, fund managers, operating partners, and other stakeholders to transition to net-zero carbon performance.

Chuck Leitner, CEO of CBRE Global Investors, said: “CBRE Global Investors has both the responsibility and opportunity to contribute to sustainability in our investments and our corporate operations.”

LSEG is first global exchange group to commit to net zero

16 February 2021

London Stock Exchange Group (LSEG) is the first global exchange group to commit to net zero by reducing its emissions by almost 50% by 2030.  

The group said it will engage all key suppliers to set science-based Scope 3 emissions targets by 2025. Its science-based targets to reduce emissions in alignment with the Paris Agreement have been approved by the Science Based Targets initiative.

David Schwimmer, CEO at LSEG, said: “Financial markets infrastructure plays a core role in enabling the transition to a net-zero economy. The focus on incorporating sustainable investment strategies has only increased during the Covid-19 pandemic and LSEG is committed to playing a leading role. As part of our own commitment, LSEG is delighted to become a member of United Nations Climate Change ‘Race to Zero’, the first global exchange group to do so.”

LSEG said it is well positioned at the heart of global financial markets to act as a facilitator, bringing together investors and issuers in three areas:

  • Data and disclosure – catalysing consistent, comparable and reliable global climate data.
  • Growth of the green economy – enabling the growth and development of green industries.
  • Climate transition across all sectors – supporting investment and capital flows to achieve climate transition and resilience.

LSEG is also the first exchange to launch a dedicated Transition Bond Segment to display debt instruments from issuers who have a corporate strategy or transition framework that is aligned to the Paris Agreement, including approved targets to achieve net zero, and discloses, manages and addresses climate-related risks in line with global standards such as the Climate Transition Finance Handbook, the CBI Transition Certification Framework and the Transition Pathway Initiative.

Nigel Topping, UK high-level actions champion for COP26, UK Government said: “To achieve net-zero emissions requires transformation across the economy. LSEG with its data and analytics, post-trade and exchange businesses sits at the centre of capital markets which is why today’s announcement is so powerful. Not only is LSEG committing to net zero in its own operations and supply chain but critically is committing to playing its role in the transition to net zero of the marketplace through its influence with investors and issuers.

“I welcome LSEG as the first exchange to commit to net zero and I look forward to following LSEG’s progress as it moves forward with these commitments to help catalyse and finance market-wide decarbonisation, including through their new transition bond segment.”

Scottish Widows’ £170bn investments to halve carbon footprint, doubling UK pension industry commitments

8 February 2021

Pensions giant Scottish Widows aims to halve the carbon footprint of all its £170bn investments by 2030 and target net zero by 2050.

The company, which has more than 6m customers in the UK, also said it will be investing billions of pounds in climate change solutions, such as renewable energy, low carbon buildings, and energy efficient technologies, by 2025.

The pension firm is calling on the rest of the industry to do the same to close the ‘green gap’ ahead of the COP26 global conference on climate change later this year.

Maria Nazarova-Doyle, head of pension investments at Scottish Widows, said: “Moving to net zero will protect savings against climate-related risks and uncertainty, and offer longer-term sustainable growth by accessing low-carbon transition opportunities.

“To get there we must set short-term targets. Carbon emissions need to halve between now and 2030 or we won’t stand a chance of meeting the longer-term net-zero goal.”

She added the company would use its stewardship activity to encourage the transition, as well as investing in climate change solutions.   

Scottish Widows said despite some progress, the overwhelming majority of UK pension providers still have no credible net-zero commitments in place, with just £177bn in meaningful, specific commitments to net zero by 2050 and a crucial interim target of 50% carbon emissions reduction by 2030. Its AUM almost doubles this to £347bn.

Stephanie Pfeifer, CEO of the Institutional Investors Group of Climate Change (IIGCC), said: “This is a very welcome commitment from Scottish Widows. Through setting a net-zero target with a strong short-term target, and identifying and implementing a practical approach to realising these goals, investors play a key role in securing a sustainable and resilient future.

“We need to see investors across the entire sector align their portfolios with a net-zero future. Scottish Widows has played an important role in IIGCC’s work, developing a net-zero investment framework to make net-zero alignment possible, together with more than 70 of our members.”

Catherine Howarth, CEO of ShareAction, said: “Kudos to Scottish Widows for their leadership in protecting pension assets, while also protecting the environment their customers and clients will retire into. The commitment to halve portfolio emissions by 2030 is especially welcome. ShareAction hopes to see many more big players in the UK’s pension sector step up in this way by the time of COP26.”

Smart Pension to halve emissions before 2030 for net zero by 2050

1 February 2021

UK master trust Smart Pension has pledged to develop its investment approach and commit to net-zero emissions ahead of 2050 and to halve its scheme emissions earlier than the 2030 deadline to align with the Paris Climate Agreement.

This quarter the workplace pension provider will introduce an allocation to a new Social Impact Fund, investing in areas such as healthcare solutions for ageing populations, social housing, technologies to improve the use of water and gender equality in employment.

Paul Bucksey, managing director of the Smart Pension Master Trust, said: “Climate change is one of the most important issues facing each and every one of us. But achieving great risk-adjusted returns for members while investing for long-term environmental and societal benefits aren’t mutually exclusive objectives, and it is important that trustees and scheme sponsors grasp the opportunity that this offers.

“We are really excited about the difference our scheme can make over the short and medium term, and are currently actively working with our partners to develop funds that actually decarbonise the economy rather than offsetting in other ways – which does not address the real problem.”

LGIM Real Assets sets out net-zero strategy

25 January 2021

LGIM Real Assets has published its strategy to deliver net zero carbon across its 76 million sq ft UK real estate portfolio by 2050.

The plan set out the firm’s undertakings to reduce emissions in the construction and refurbishment, operational, and disposal and demolition stages of real estate. ‘With the built environment contributing c.40% of global greenhouse gas emissions, it has a pivotal role to play in global efforts to achieve net zero carbon,’ it says.

Bill Hughes, head of real assets at LGIM said: “We have committed to deliver a portfolio of assets where every building we construct, own and manage achieves net zero carbon by 2050.  In the shorter term, we will reduce the operational carbon and energy intensity of our landlord-controlled areas by 60% over the next 10 years.  

“Collaboration across our organisation and with external partners will be the key to decarbonising and future proofing these assets. We will be working closely with all our stakeholders; from our colleagues, designers and developers, to building occupiers, managing agents and facilities managers. These partnerships will be vital in our race to net zero.”

Shuen Chan, head of ESG at LGIM Real Assets added: “LGIM Real Assets holds £21.3 billion of UK real estate across more than 700 properties. As long-term investors and real asset owners, we have a responsibility to protect our clients’ capital through integrating ESG considerations into the investment process. By future proofing our assets, we can ensure they are resilient and able to adapt to both climate related transition and physical risks. Through the integration of sustainable practices into everything we do, we believe we can deliver enhanced returns for our investors in the form of higher occupancy rates and the ability to generate better rental income.

Climate change is a global challenge that requires a collective global effort by governments, policymakers, companies, investors and society. Achieving our net zero goals will not be easy, but I believe that our industry can decarbonise and move to being part of the climate change solution rather than part of the problem.”

Aegon UK commits to net zero across pension default funds by 2050

14 January 2021

Aegon UK plans to achieve net zero carbon emissions across its default pension fund ranges by 2050. 

The firm said the commitment to being carbon neutral is being addressed both from an investment perspective as well as a corporate perspective. Since 2016, Aegon’s main operations (UK, US and the Netherlands) have achieved carbon neutral status by reducing emissions from their own operations and supporting offset projects in cooperation with the NGO ClimateCare. 

Tim Orton, managing director for investment solutions at Aegon said: “As investment providers and a responsible business, we have a large part to play in the fight against climate change. We believe that this is not just an environmental issue, but one that is central to the future financial wellbeing of our customers.  

“Investors are giving us a very clear message that they want to see action. Aegon and other providers have the power to influence the companies that they invest in and the third-party fund managers who provide investments. Businesses that fail to change, will fail.” 

Aegon customers have expressed their wish to see climate considerations taken into account. In a survey among Aegon’s customer panel, 77% said climate change is an important risk to consider when investing for the future. Nearly half (45%) felt more strongly and wanted to see investing for a net-zero carbon future made mandatory. 

At the end of 2020 Aegon confirmed those invested in its LifePath strategies, the default for its TargetPlan occupational schemes and Master Trust, would see a significant boost to its ESG exposure. By mid-way through this year more than half of total LifePath assets, around £3bn, will be invested in ESG strategies. 

Macquarie AM announces net zero commitments

9 December 2020

Macquarie Asset Management has set out ambitions to manage its portfolio of investments with net zero emissions by 2040.

In a letter to investors ahead of the fifth anniversary of the Paris Agreement, head of Macquarie AM Martin Stanley said the firm is aiming to become a global leader in sustainable real asset management and support the transition to a low carbon economy.

Stanley said: “As long-term investors in companies that underpin economies and communities, we take our responsibility to address climate risks seriously. As stewards of these vital businesses, we have a duty to ensure they play their part in global efforts to address our warming planet. Today we are announcing a range of commitments that will reduce emissions across our portfolio and build sustainable long-term value for the benefit of our portfolio companies, our clients and the communities in which we operate.”

See also: – Asset managers unite to call for Paris-aligned climate change reporting

The group will work with investee companies running alternative assets to come up with Paris-aligned/net zero business plans by the end of 2022. The steps, some of which are already underway, are mapped out below:

  • Measure greenhouse gas emissions of all portfolio companies
  • Identify pathways to reduce emissions
  • Develop business plans that contribute to a net zero economy by 2040, or sooner
  • For new investments, target completion of these steps within 24 months of acquisition
  • Work with our portfolio companies with the aim that they will be meeting their Paris-aligned/net zero emissions reduction pathways by 2030
  • Report on our progress annually

In the case of portfolios of public securities, Macquarie AM said it will support the goals of the Paris Agreement in a manner consistent with our client-guided fiduciary and regulatory responsibilities.  

Robeco announces net zero AUM ambition

4 December 2020

Netherlands head-quartered Robeco has laid out plans to achieve net-zero greenhouse gas (GHG) emissions by 2040 across its entire assets under management.

The group said in a statement it has set itself targets and mapped out how it will reduce GHG emissions to net zero over the next two decades to play its part in limiting global warming to 1.5 °C.

See also: – Robeco targets obesity reduction as ESG play

Reducing portfolio emissions, investing in climate solutions such as green bonds, and engaging with investee firms are all included in the plans, while the group will also advise its clients on how to set decarbonisation goals for themselves.

Gilbert Van Hassel, CEO of Robeco, commented: “It is clear from scientific reports about climate change and carbon emissions that society has to act now. We cannot solve big problems such as climate change and the rapid decline of biodiversity on our own. But what we can do is set a clear example for the broader industry, work together and encourage other financial institutions such as asset managers to follow suit. We have set this ambition with the conviction that investing is not only about creating wealth but also about contributing to well-being.”

Robeco has already undertaken a number of actions to limit its carbon footprint. It expanded its fossil fuel exclusion policy to all funds, hired a climate strategist and a climate data scientist, and launched series of investment strategies to contribute to this ambition, such as a global green bond strategy.

Victor Verberk, CIO for fixed income and sustainability at Robeco, added: “We aim to make our contribution to the Paris Agreement ambition, as climate change represents a significant threat to investors and the global economy. We acknowledge the responsibility of the investment industry towards climate change risks through the investment decisions that we make and the active dialogue we have with investee companies and other institutions. With this net-zero ambition we aim to contribute to a low-carbon economy.”

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...