Our climate metrics and target

First Sentier Group has the ambition to reduce greenhouse gas emissions across its investment portfolios in line with a target of progressing towards net zero emissions by 2050 (or sooner) and across its business operations in line with a target of net zero emissions by 2030 (or sooner).

We believe that society must drastically reduce greenhouse gas emissions if we are to avoid the worst consequences of the climate crisis. For this reason First Sentier Group supports the global transition to a low carbon economy in line with the goals of the Paris Agreement. As allocators of capital, stewards of our clients’ assets, and as active shareholders in companies on their behalf, the individual and collective decisions we make as investors can influence the nature and speed of this transition. We acknowledge that we have a wider responsibility to contribute through our investment activities and business operations to a sustainable economy and society.

Most investment teams pursuing active management strategies have developed a range of targets at team, portfolio and/or company level that they wish to pursue over the short-, medium- and long-term. Details are available on their pages under Our capabilities. Our net zero approach is guided by the Paris Aligned Investment Initiative’s Net Zero Investment Framework (PAII NZIF). Teams have set portfolio coverage and/or carbon intensity reduction targets and have committed to monitoring and tracking our progress against those targets.

The percentage of assets covered by climate targets reported through the Net Zero Asset Managers (NZAM) initiative in August 2023 was 37.92% of total assets under management (AUM) or US$59.6 billion¹. As at 31 December 2025, the current proportion of our total AUM managed in line with our net zero ambition is 64.8%², with 48% of total AUM covered by a 2030 interim climate target. The remaining portion of AUM managed in line with the Group’s net zero ambition comprises strategies that have adopted long term (2050) net zero commitments but have not set formal 2030 interim targets. We aim to increase the proportion of assets covered by formal net zero targets over time, as set out in our Climate Change Action Plan released in 2022 and as updated annually in our Climate and Nature Report. First Sentier Group will continue to evaluate future inclusion of additional asset classes and investment strategies as methodologies and data become available.

¹ Although Stewart Investors are part of First Sentier Group, its AUM (USD 25.4 bn as of 31 December 2021) was not included in First Sentier Group’s net zero target scope as they are a separate signatory to Net Zero Asset Managers Initiative.

² Based on organisation-wide AUM, inclusive of AlbaCore, First Sentier Investors, FSSA Investment Managers, Igneo Infrastructure Partners, RQI Investors and Stewart Investors.

NZAM interim targets

Below are the initial NZAM targets set in August 2023. Further information on the latest investment team targets can be found on their respective pages under Our capabilities.

Target type	Portfolio alignment	Emissions intensity
Metric	NZIF Categorisation³	tCO₂e /$m revenue
Objective	50% of invested companies that are “Aligned” or “Aligning” to net zero	50% reduction in investee company Scope 1 and 2 GHG emissions intensity / US$1 million revenue
Target year	2030	2030
Baseline	2021⁴	2019 (1436.9 tCO₂e/$m revenue)
Scope	Committed strategies still under management include Australian Equities Growth, Asia Fixed Income and FSSA Investment Managers for the alignment target, and Global Listed Infrastructure Securities for the intensity target. Scope 1 & 2 emissions of investee companies represent the main data sources into our calculations. In our application of the NZIF we have included scope 3 emissions to the extent possible. Only where Scope 3 emissions are disclosed to the Carbon Disclosure Project (CDP) with credible categorisation that would allow us the make decisions made on reasonable grounds, the data is included in our assessments to classify a company in line with the PAII NZIF methodology guidance. Scope 3 is not included for target setting yet and as Scope 3 disclosure and target setting becomes available this will over time be phased into our assessments.

These objectives were set based on a ‘fair share’ emission reductions scenario. We understand that ‘fair share’ emission reductions will depend on factors such as the existing emissions profile of the investment assets committed to a transition to net zero, the geographic location of the assets and the degree of difficulty associated with the decarbonisation of the assets. As the decarbonisation rate will vary based on sectors and regions, we view that our team-level targets are in line with delivering the fair share 50% global reduction in absolute GHG emissions. This is based on our initial baseline assessments of net zero readiness and pathways of our investee companies. We will continue to monitor the sectoral pathway developments and update this going forward.

³ Please refer to the net zero classification of companies below.

⁴ While we did not have data on asset alignment as at 31 December 2021, we have developed a model to monitor and report progress on alignment going forward.

First Sentier Group follows the Net Zero Investment Framework (NZIF) on classifying companies' net zero progress.

Companies can be classified as a) not aligned, b) committed to aligning, c) aligning towards a net zero pathway, d) aligned to a net zero pathway, or e) achieving net zero. This classification follows criteria outlined in the NZIF.

Ambition - A long term goal consistent with achieving global net zero emissions by 2050
Targets - Short- and medium-term emissions reduction target (scope 1, 2 and material scope 3)
Disclosure - Disclosure of scope 1, 2 and material scope 3 emissions
Decarbonisation strategy - A quantified plan, setting out the measures that will be deployed to deliver on greenhouse gas targets, proportions of revenues that are green and, where relevant, increases in green revenues
Capital allocation alignment - A clear demonstration that the capital expenditures of the company are consistent with achieving net zero emissions by 2050
Emissions performance - Current emissions intensity performance (scope 1, 2 and material scope 3) relative to targets

Not aligned

Companies have not started their journey or no commitment to decarbonise in line with achieving net zero.

Committed to aligning

Increasingly companies are making a first step based on criteria 1 (ambition). These companies can be considered as ‘committed to aligning’.

Aligning

For High Impact sectors, achieving criteria 1, 2, 3 and 4 (ambition, targets, disclosure and decarbonisation plan). For other sectors, achieving criteria 1,2 and 3 (ambition, targets and disclosure).

Aligned

For High impact sectors, achieving all six criteria. For other material sectors, achieving criteria 1,2,3 and 6 (ambition, targets, disclosure and emissions performance).

Net zero

A company which is already achieving the emissions intensity required by the sector and regional pathway for 2050, and whose ongoing investment plan or business model will maintain this performance.

Source: https://www.iigcc.org/net-zero-investment-framework

An important part of furthering the conversation with clients around climate change risks and opportunities is transparency and good quality information. Each investment team has prepared a climate change statement describing their approach to incorporating climate-related issues into their strategies.

Carbon footprint reports

The listed equity teams also publish carbon footprint reports which can be accessed from their respective team pages. Below is the combined footprint for all listed equity portfolios.

Learn about our carbon footprint metrics

The dashboard is best viewed in full screen. Click on the icon on the dashboard bottom right.

Disclaimer

To the extent this material 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 at the date of publication and have been formulated by the relevant investment team in accordance with either internally developed proprietary frameworks or are otherwise based on the Paris Aligned Investment Initiative Net Zero Investment 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 these commitments and targets depend on the ongoing accuracy of such information and representations as well as the realisation of such future matters. Any commitments and targets set out in this material are continuously reviewed by the relevant investment teams and subject to change without notice.

These targets have been formulated based on: (i) available information and representations made to First Sentier Group by third parties, including, but not limited to, portfolio companies; and (ii) assumptions made in relation to future matters such as the implementation of government policy in climate-related areas, enhanced future technology and the actions of portfolio companies. Such information and representations may ultimately prove to be inaccurate and such future matters may not ultimately be realised. As such, First Sentier Group cannot guarantee the achievement of these targets. These targets are subject to ongoing review and may change without notice.

First Sentier Group’s responsibility to assess and engage with companies on their fossil fuel exposure continues to be executed at the individual investment team level, reflecting their autonomy, respective investment strategies and client mandates. This approach recognises the diversity of client objectives across the Group while supporting ongoing engagement on financially material climate‑related risks.

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First Sentier Investors became a Certified B Corporation in November 2022 with a score = 107.2, noting that the passing score is 80. Please visit the B Corp Directory to view our report and for additional information regarding the assessment process.

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Our climate metrics and target

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