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 What we invest in.
| Target type | Portfolio alignment | Emissions intensity |
| Metric | NZIF Categorisation4 | 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$1 million revenue |
| Target year | 2030 | 2030 |
| Baseline | 20215 | 2019 (1436.9 tCO2e/$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.
4 Please refer to the net zero classification of companies below.
5 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.
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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