SNAPSHOT2 min read

Funding the future: Investing in climate action. Our Climate Report 2023 is now live!

We had a chat with two of our senior leaders: Andy Howard our Global Head of Sustainable Investment, and Madeleine Cobb, our Global Head of Corporate Sustainability to share some valuable insights from the report and give you a glimpse into our sustainability efforts.

05/04/2024
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Authors

Andy Howard
Global Head of Sustainable Investment
Madeleine Cobb
Head of Corporate Sustainability

We recently launched our 2023 Climate Report, highlighting how we can be a catalyst for change, using our expertise and influence to encourage businesses to transition towards a net zero future. The Report aims to give our investors and other stakeholders a better understanding of our climate transition plan and progress. This includes how we manage our business‘ and clients’ investment exposure to climate-related risks, our strategic resilience to these risks and the climate and nature-related opportunities we are pursuing

The Report also updates on our progress towards our science-based targets and reveals our achievements which include 743 climate-related engagements, top ranking in the Global Canopy Forest 500 report, and joining Nature Action 100. Our investments in green hydrogen and solar projects further demonstrate our commitment to making a significant impact in sustainability.

Recognizing that nature is considered to be one of the principal solutions for the climate crisis, we also include some nature-related disclosures. In January 2024, the Taskforce for Nature-related Financial Disclosures (TNFD) announced the inaugural “Early Adopters”. We were part of this cohort and we intend to start making disclosures aligned with the TNFD recommendations for our financial year 2024, recognizing that data availability remains limited among investee companies and assets. This Report supplements the climate-related financial disclosures in our Schroders plc 2023 Annual Report and Accounts.

We had a chat with two of our senior leaders: Andy Howard (AH), our Global Head of Sustainable Investment, and Madeleine Cobb (MC), our Global Head of Corporate Sustainability to share some valuable insights from the Report and give you a glimpse into our sustainability efforts.

What is our approach to sustainability?

MC: Sustainability is a fundamental part of our business strategy. We prioritize it through four key pillars: Insights, Influence, Innovate, and Inspire. Through these, we can better understand sustainability trends, engage with companies to drive positive change, develop innovative solutions, and of course lead by example in our own operations. We believe that investing in companies and assets transitioning to net zero is more likely to provide sustained investment returns.

How many companies did you engage with on climate and nature in 2023?

AH: 743! We engaged with them on climate-related topics, with a specific focus on areas such as emission reduction goals and transition plans. We also placed significant emphasis on our commitment to eliminate commodity-driven deforestation from our investment portfolios by 2025, engaging with 399 companies on biodiversity.

Within this, 73% of engagements were specifically centered around deforestation, while the remaining engagements covered various sub-themes such as sustainable food and water, nature loss, circular economy, pollution, and waste.

And how do you track your engagements with investee companies?

AH: We use ActiveIQ, our proprietary database. Since 2021, we've logged engagements with over 1,000 companies, primarily on climate topics like emission reduction goals and transition plans. This dataset helps us compare the impact of our engagements to those we didn't engage with, providing valuable insights.

What are some of those insights?

AH: It’s clear that the strategy we've adopted is succeeding so far. Relative to peers, the large global companies we've engaged with since 2021:

  • Were more than twice as likely to publish new emission reduction targets.
  • Reduced their emission intensity twice as quickly.
  • Outperformed by approximately 4% annually.

And what about the sustainability achievements of our own business?

MC: Our operational Scope 1 and 2 emissions have decreased by 35% since 2019 (a reduction of 2% from 2022), and 98% of our electricity use across our global offices comes from renewables (+3% from 2022). Combined with engagement and financed emissions progress, this has resulted in us maintaining our leadership ‘A’ rating for CDP for the second consecutive year.

What role do you play with policy makers on climate and the wider industry?

MC: We're actively involved in working with policymakers to drive the transition towards a sustainable future, shape regulatory trends, and provide clear guidance to companies and investors. To see our full range of sustainable investment policies, disclosures and reports, click here

Do we plan to produce a nature report in addition to this report?

MC: The same forces driving the climate crisis are now affecting nature and biodiversity – so we’ve included nature-related information in the 2023 Climate Report, where relevant, and committed to being an 'Early Adopter' of the Taskforce on Nature-related Financial Disclosures (TNFD) in 2024. As a TNFD Early Adopter, we plan to commence disclosure in line with the TNFD recommendations in corporate reporting from financial year end 2024 (to be published in 2025), recognizing data availability remains limited among investee companies and assets. As we have already developed proprietary analysis to assess impacts, dependencies, risks, and opportunities related to nature across the portfolios we manage, we expect this will support our own TNFD reporting, whilst also benefiting from improved disclosure more broadly.

How are we using our position to protect and restore nature?

AH: Our Plan for Nature report highlights our commitment such as developing insights on nature and biodiversity risk, leveraging our influence as active investors to support companies in transitioning to sustainable business models, offering investment solutions that channel capital towards nature restoration, and actively participating in initiatives such as the Natural Capital Investment Alliance and the Finance for Biodiversity Pledge. In addition, in 2023, we joined Nature Action 100, a group of asset managers kickstarting an engagement drive in 2024, targeting 100 companies in eight key sectors deemed systemically important to reversing nature loss.

Read the full Report here

Important information

Our proprietary tools are designed to enhance the research and evaluation process but do not guarantee favorable investment results. 

Authors

Andy Howard
Global Head of Sustainable Investment
Madeleine Cobb
Head of Corporate Sustainability

Topics

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