Specialist in Asia Pacific, Japan, China, India and South East Asia and Global Emerging Market equities.

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Stewart Investors manage investment portfolios on behalf of our clients over the long term and have held shares in some companies for over 20 years. They launched their first investment strategy in 1988.

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Climate change

Climate change

Why is it important to us?

We believe that society must drastically reduce greenhouse gas emissions if we are to avoid the worst consequences of the climate crisis.

It has become obvious that immediate climate action is needed in order to meet the goal of limiting rises in global temperature to 1.5 degrees Celsius.

The individual and collective decisions we make as active investors can influence the nature and speed of this transition.

In 2022, the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 27) was convened with hopes for more climate change action.

While it was disappointing no significant strides were made in terms of emissions targets, the creation of a Loss and Damage Fund was a win for vulnerable countries faced with growing climate disasters.

What is First Sentier Investors doing?

We are playing an active role in the transition to a low-carbon economy by managing investment risks, identifying opportunities and driving change through our stewardship approach.

We support the global transition to net zero emissions in line with the goals of the Paris Agreement, and in 2022, we made a public commitment in relation to net zero targets.

We are committed to reducing greenhouse gas emissions across investment portfolios in line with a target of net zero emissions by 2050 (or sooner) and across business operations in line with a target of net zero emissions by 2030 (or sooner).

This includes a range of targets committed to by investment teams over the short, medium and long term and an aim to increase the proportion of assets covered by formal net zero commitments over time.


The 5 C's of Climate Action

Our net zero transition strategy is detailed in our Climate Action Plan (CAP), which was launched in 2022 and includes details on our investment and operational alignment.

We have summarised our approach as ‘The 5 C’s of Climate Action’.

Company engagement

We will use our influence and proxy voting to influence companies and we will allocate capital to help accelerate the climate transition.


We will continue to support climate-related industry collaborations, climate policies, and regulation, to drive systemic change.


We aim to be a trusted partner who can support clients in their transition to a low carbon economy.


We will be transparent about our progress on reaching net zero, and provide evidence for any climate-related claims we make.

Corporate sustainability

We are decarbonising our business operations through a broad range of initiatives, and will report on progress.

In response to various global regulations and guidance coming into force, we implemented a comprehensive Climate Risk Management Plan (CRMP), which sets out a pathway for our governance and oversight of climate-related risks and opportunities, our strategy and risk management approach, and the metrics we are tracking and targets we have set. The CRMP is based on the Task Force on Climate-Related Financial Disclosures (TCFD) framework. Our updated TCFD aligned disclosures are available in our firm-level Climate Change Statement (CCS), and in investment team level CCS’s.

Going forward, we will regularly report on our progress against net zero commitment at firm and investment team levels. The CCS and CAP can be found on our website, along with each investment team’s respective net zero targets.

We have also upgraded our interactive climate risk dashboard to include a broader range of climate-related metrics as recommended by the TCFD. This information is available to our investment teams, other teams across the business, senior management and clients. We plan to make it publicly available on our website in 2023.

Investment team progress

In addition to the firm-wide work on net zero targets and reporting, investment teams have made progress in the following areas:

Fixed Income, Short Term Investments and Global Credit

The Fixed Income, Short Term Investments and Global Credit team has continued to engage with companies on their strategy and progress towards becoming net zero, with a focus on firms in the Australian and European banking sectors, utilities, materials, chemicals, and retail sectors. Notably, the team has begun engagement with Australian states and New Zealand local authority issuers on their sustainability approach including climate change and modern slavery and advocating for improved transparency and where relevant to set targets. The Sovereign, Supranational and Agency (SSA) sector has traditionally been the most difficult to gain access to and engage with on ESG issues, although the team has been encouraged by the receptive and open approach of these issuers.

Australian Equities Growth

In 2022 the Australian Equities Growth team started assessing the quality of portfolio companies’ transition plans and set multi-year engagement agendas for eight portfolio stocks either materially exposed to climate change or perceived to be lagging on climate commitments. On oil and gas specifically, the team set out the features it expects in a transition plan and engaged with producers on the alignment of capital expenditure with their climate commitments.

Australian Small and Mid Cap Companies

The Australian Small and Mid Cap Companies team engages with companies in their portfolios on their strategy and progress towards becoming net zero. Some smaller companies have lagged the larger end of the market when it comes to putting net zero strategies in place. However, the team understands the challenges that some smaller companies face and is encouraged by the progress that has been made.

Stewart Investors

Stewart Investors has written to 108 companies to encourage them to measure and disclose their current carbon footprint, set carbon reduction targets appropriate for their business and industry and then report on their progress towards meeting them. The companies fall under three broad categories: those with neither climate disclosures nor targets (62 companies), those with disclosures but no targets (39 companies), and a small number (seven companies) with targets but no disclosures. At the end of 2022, the team had received responses from 82 of the companies and held three meetings with companies. Over the next year, the team will continue to follow up with these companies while assessing the progress of companies across its portfolios. The team recognises that climate change is relevant to different companies in different ways but that all companies need to make progress on reducing emissions and increasing resilience.

Global Listed Infrastructure

Global Listed Infrastructure (GLI) tends to have a higher level of carbon intensity given its exposure to the electric power and transportation sectors. To address the impacts of climate change, it is critical that infrastructure companies invest in adaptation and mitigation. Active investors can support this by directing capital to utilities that are leading the shift from fossil fuels to renewable energy, and identifying utilities with under-utilised wind and solar resources. The GLI team has committed to engaging with the 10 largest emitters in the portfolio and is working collaboratively with Climate Action 100+ to engage with two key companies on behalf of the group.


In 2022, Realindex released its climate statement in which it committed to raising issues of the transition to net zero with all companies it engaged with. During the year it engaged with several companies on issues of improved emissions disclosure, setting science-based targets, and disclosure of capex expenditure needed for the transition.

Reporting on progress

Figure 1: Table of key carbon metrics for all investment teams

This table shows the following key carbon metrics for all investment teams, as recommended by the Task Force on Climate-Related Financial Disclosures (TCFD).

Source: First Sentier Investors, MSCI. Data as at 31 December 2022

The data set out above are estimates based on data sourced by First Sentier Investors. This data is current as at 31/12/2022. It is based on information and representations sourced from third parties (including portfolio companies), which may ultimately prove to be inaccurate. No assurance is given or liability accepted regarding the accuracy, validity or completeness of this data and no reliance should be placed on it by any third party. Calculations for Multi-Asset Solutions are for objective based funds only.

Carbon footprint: the carbon emissions of a portfolio per US $m invested. Scope 1 and 2 emissions are allocated to investors based on an enterprise value ownership approach i.e. if an investor owns 10% of a company’s total enterprise value including cash (EVIC), then they own 10% of the company and therefore 10% of the company’s emissions. This is then normalised by portfolio value.

Weighted average carbon intensity: portfolio weighted average of each company’s carbon intensity (scope 1 & 2) per US $m sales.

Total carbon emissions: this metric measures the absolute carbon emissions associated with a portfolio (Scope 1 and 2) expressed in tCO2e2. Scope 1 and 2 emissions are allocated to investors based on an enterprise value ownership approach (as with the carbon footprint).

Fossil fuel companies: This indicator shows the average number of fossil fuel companies (as defined by MSCI) per portfolio. This includes companies involved in extraction or production, and/or those that own reserves.

Carbon footprint reports for each investment team, and an explanation of how each measure is calculated, is available on the FSI website.

Note: Portfolio emissions and carbon footprint are now based off Enterprise Value as a proxy for company size, as recommended in the most recent Partnership for Carbon Accounting Financials (PCAF) Standard. This is a change from previous years where calculations were based off Market Capitalisation.

Figure 2. Listed equities teams emissions profiles

Source: First Sentier Investors, MSCI. Data as at 31 December 2022

The data set out above are estimates based on data sourced by First Sentier Investors. This data is current as at 31/12/2022. It is based on information and representations sourced from third parties (including portfolio companies), which may ultimately prove to be inaccurate. No assurance is given or liability accepted regarding the accuracy, validity or completeness of this data and no reliance should be placed on it by any third party.

Figure 3. Listed Equities Wtd. Avg. Carbon Intensity

tCO2e/US$m sales

Source: First Sentier Investors, MSCI. Data as at 31 December 2022

2. tCO2e refers to tonnes of carbon dioxide equivalent.


A key challenge for investors has been the rapidly evolving regulatory environment on mandatory climate disclosure across many global markets. While most initiatives are aligned to the TCFD, most local disclosure frameworks have unique requirements, and some are significantly more prescriptive than others.

As a global investment manager, we need to comply with a multitude of different disclosure requirements. Although this is challenging, we have welcomed the additional guidance, and the opportunity to uplift our approach globally.

The quality and availability of data reported by investee companies and collated by ESG data providers remains a challenge for investors. For example, Oil and Gas reporting entities disclose Scope 1 emissions based on either operational control or equity share. Individual data providers choose one of these, which can make it difficult to compare. Another example is where some data providers release GHG emissions data following companies’ reporting cycles, while others update their data sets annually. We therefore welcome further guidance from the TCFD and the PCAF to create a more standardised industry approach and have worked closely with our data providers on these topics in 2022.

Future plans

In 2022 we were focused on setting a solid foundation for the implementation of our net zero commitments, as well as developing a robust governance and disclosure framework for climate-related risks and opportunities, and supporting data.

Moving forward, we will be more focused on working with investment teams and other stakeholders to continue the work we have started to implement our commitments and monitor progress. This will include providing sector level guidance and training on assessing transition plans, developing updated proxy guidance, and supporting teams with the integration of additional forward-looking climate metrics, physical risk, and resilience

We will complete our first reporting to the Net Zero Asset Managers initiative and will also report on progress on implementing our CAP.


In 2022, First Sentier Investors made a commitment to reduce greenhouse gas emissions across our investment portfolios in line with a target of net zero emissions by 2050 (or sooner) and across our business operations in line with a target of net zero emissions by 2030 (or sooner).

We have sought to align our Climate Change Statement with the Task Force for Climate Related Financial Disclosure's recommendations.

We have written a series of white papers (below) which present the context for each issue, the implications for investors, and provide guidance on how investors can incorporate these issues into their risk management and investment decision-making processes.

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To the extent this website contains any measurements or data related to environmental, social and governance (ESG) factors, these measurements or data are estimates based on information sourced by the relevant investment team from third parties including portfolio companies and such information may ultimately prove to be inaccurate.

To the extent this material contains any ESG related commitments or targets, such commitments or targets are current as of the date of this publication. They have been formulated by the relevant First Sentier Investors (FSI) investment team in accordance with either internally developed proprietary frameworks or are otherwise, based on the Institutional Investors Group on Climate Change’s (IIGCC) Paris Aligned Investment Initiative framework. The commitments and targets are based on information and representations made to the relevant investment teams by portfolio companies (which may ultimately prove not be accurate), together with assumptions made by the relevant investment team in relation to future matters such as government policy implementation in ESG and other climate-related areas, enhanced future technology and the actions of portfolio companies (all of which are subject to change over time). As such, achievement of the commitments and targets set out on this website depend on the ongoing accuracy of such information and representations as well as the realisation of such future matters. FSI will report on progress made towards achieving these targets on an annual basis in its Climate Change Action Plan. The commitments and targets set out on this website are continuously reviewed by the relevant investment teams and subject to change without notice.