Our climate metrics and target

First Sentier Investors 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 the First Sentier Investors 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 current proportion of our total assets under management (AUM) to be managed in line with our net zero ambition was 65.7%¹ (as per 31 December 2023). 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 our 2023 progress update. First Sentier Investors will continue to evaluate future inclusion of additional asset classes and investment strategies as methodologies and data become available.

¹ Based on organisation-wide AUM as at 31 December 2021, inclusive of Stewart Investors. First Sentier Investors' initial AUM committed is 37.9% while Stewart Investors initially committed 100% of its AUM. For Net Zero Asset Managers Initiative (NZAM) reporting, Stewart Investors has an individual net zero commitment that is separate from First Sentier Investors’ commitment.

First Sentier Investors follows guidance from the Institutional Investors Group on Climate Change (IIGCC) 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 by the IIGCC.

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 Institutional Investors Group on Climate Change (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 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.

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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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