Maitland/AMO Sustain Monitor – 1 April 2021

1st April 2021

A new milestone was achieved this week with the announcement that a third of the world’s assets under management are supporting targeting net zero. Some of the world’s largest asset managers, including BlackRock, Vanguard and Jupiter Asset Management have joined the Net Zero Assets Managers Initiative, which commits them to a series of pledges to decarbonise their portfolios.

 

The Net Zero Assets Managers Initiative now has 73 signatories who are all aiming to achieve net zero greenhouse gas emissions in their investments by 2050 or sooner. To ensure progress, signatories are committed to setting interim targets for 2030 in line with halting global warming at 1.5°C.

 

Transparency on climate risk via the Task Force for Climate-related Financial Disclosures (TCFD) recommendations will be a key driving force for accountability in the run up to the 2030 target and beyond. With BlackRock’s Chairman and CEO Larry Fink throwing his weight behind the TCFD recommendations, and the UK government announcing its intention for TCFD-aligned disclosures to be mandatory across the economy by 2025, climate risk reporting is looking to become an essential part of the decarbonisation toolkit.

 

If you’d like to hear more about Maitland/AMO Sustain and our bespoke sustainability offering, please contact sustain@maitland.co.uk

 


A round-up of this week’s sustainability news…

In Business

  • NET ZERO STREAMING: Video streaming giant Netflix has announced its net zero strategy, which includes a science-based target to reduce Scope 1 and 2 emissions. It will also be investing in nature-based offsetting projects.
  • RECKITT PARTNERSHIP: Consumer goods company Reckitt has partnered with the WWF to work on sustainable innovation; engaging customers, staff and partners with nature conservation, and funding conservation projects in the Ganges and Tapajos river basins. Reckitt will donate £10m to the conservation NGO over the course of the partnership.
  • SKY FUND: Sky has launched the ‘Sky Zero Footprint Fund’ – a £2m campaigned aimed at accelerating and amplifying “positive environmental messages and behavioural change through the power of TV”. Open to media agencies, creative agencies and brands, the most impactful and creative ideas will secure £1 million in advertising support.
  • CERTIFIED GIN: Bombay Sapphire is on track to certify all of its key ingredients as sustainable by the end of 2021, a four year improvement on its original target of 2025.
  • CEO VIEW: A PWC report has revealed that after a year of disruption wrought by Covid-19, UK CEOs are looking to base their recovery on ‘no regrets’ moves: those decisions most within their control that will deliver positive change and a foundation for sustainable growth.
  • INSECTS FOR PETS: Mars Petcare has announced plans to launch the UK’s first fully insect-based cat food, alongside releasing new packaging that contains less plastic.
  • BA INVESTMENT: British Airways, along with Shell Ventures and Systemiq, has announced joint funding in hydrogen-electric flight specialist ZeroAvia. The start-up has received $24.3m in investment for the development of its first 50+ seater zero emissions aircraft.

In Politics

  • RACE TO ZERO: The UK government has announced that nearly a third of the UK’s FTSE100 companies have signed up to the UN’s Race to Zero campaign. Firms including AstraZeneca, BT Group, Sainsbury’s, and Unilever have pledged to eliminate their contributions to carbon emissions by 2050.
  • GRANTS SCRAPPED: The UK government has made a surprise update to home energy efficiency plans by boosting funding for local authority upgrade schemes in favour of the Green Homes Grant, which has formally been scrapped.
  • EU OVERESTIMATES: The European Corporate Leaders Group has warned that EU economic and energy modelling could be overestimating the cost of achieving Europe’s 2030 climate goals, which may undermine the green transition.
  • GO FURTHER: Environment think tank Green Alliance has urged the UK government to set a legally-binding target to halve resource consumption by 2050, arguing that by doing so it would set a global example ahead of COP26.
  • RECKITT AGAIN: Reckitt has also been announced as the official Hygiene Partner for COP26, as the UK puts the safety of delegates and the local community front and centre in planning. Reckitt is the eighth Principal Partner who will support the delivery of the climate conference. The company joins SSE, ScottishPower, NatWest Group, National Grid, Sky, Sainsbury’s and Hitachi.
  • BIDEN ON WIND: US President Joe Biden has sought to kickstart the nation’s offshore wind industry by setting a target of 30GW of generation capacity by 2030.
  • VISION 2030: As part of Saudi Arabia’s Vision 2030 plan which aims to wean the country off its dependence on oil, it has announced a new ‘green initiative’ to tackle the climate crisis which includes planting 10bn trees.

In Investment

  • CANDRIAM TAKES ACTION: Investment manager Candriam has launched a Facial Recognition Technology initiative that aims to address the ESG risks posed by the technology. It plans to advocate for improved corporate disclosure on its use and will encourage other investors to do the same.
  • TALE OF TWO SHARES: A Carbon Tracker report entitled ‘A Tale of Two Shares’ has found that the value of share offerings in fossil fuels have plummeted by $123bn since 2012. According to the report, the financial returns from fossil fuels had been in decline well before Covid-19 restrictions led to lower demand and a drop in prices.
  • AGRI-INVESTMENT: A survey by the National Farmers’ Union has found that record proportions of farmers are planning to invest in measures to improve energy efficiency, increase renewable energy sourcing and boost carbon sequestration.
  • AVIVA PENSIONS: Aviva has announced the launch of an actively-managed equity fund that will invest in the shares of companies across the globe that are actively seeking to respond to the climate crisis and build a lower carbon economy. The fund was opened to Aviva’s workplace pension scheme platforms yesterday.
  • L&G ROADMAP: L&G’s Workplace DC business, together with the L&G Mastertrust, have unveiled their proposed roadmap to achieve net-zero by 2050 across all of their auto-enrolment default investment options. The new framework targets carbon emissions intensity reduction of 50% by 2025 and 65% by 2030 in target date default. It will be available to over 4 million DC scheme members.
  • MERCER STEPS UP: US asset manager Mercer has pledged to achieve a net zero investment portfolio by 2050 as part of its global investment solution roadmap.

In Research

  • ESG AND CEOS: A study has shown a casual relationship between CEO turnover and extreme ESG risk exposure. RepRisk data reveals that when companies scored more than 60 on a reputational risk scale, which indicates severe negative media attention on ESG issues, CEOs were more likely to be fired in the following year.
  • RAINFOREST LOSS: New data from Global Forest Watch has revealed that the tropics lost 12.2 million hectares of tree cover in 2020. 4.2 million hectares of loss, an area the size of the Netherlands, occurred within humid tropical primary forests, which are especially important for carbon storage and biodiversity.
  • GREEN JOB DECLINE: ONS data has revealed that the number of people employed in the low carbon and renewable energy economy fell from 235,900 in 2014 to 202,100 in 2019.
  • FOR THE FEW: Research from environmental charity Possible has revealed that an “elite minority” of frequent flyers cause most of the climate damage resulting from aviation emissions. In the US, 12% of people took 66% of all flights, while in France 2% of people took half of the flights.