Addenda Capital Inc.
Addenda Capital is an investment management firm providing solutions for institutional and high net worth clients. Addenda offers clients expert services in a broad range of asset classes and has offices in Montréal, Guelph, Regina and Toronto. Addenda joined the Net Zero Asset Managers Initiative in November 2021 and made its Initial Target Disclosure in November 2022.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
15% of total AUM (USD $3.9 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio decarbonisation reference baseline
58.5 tCO2e per million USD invested.
Engagement threshold baseline
In-scope AUM considered at least ‘Committed to Aligning’ with net zero or subject to engagement and stewardship actions:
Approximately 60% of in-scope assets (equivalent to 9% of total AUM)
Allocation to climate solutions baseline
Approximately $1.5B of AUM in climate solutions.
This includes Addenda’s thematic ESG products or sub-components of thematic ESG products such as:
a) Climate themes within our Impact Fixed Income Fund (e.g. holdings such as green bonds for renewables or clean transportation)
b) Addenda’s Climate Transition Equity Funds which focus on holdings that have made a commitment on climate change and net zero. The companies will be expected to progress on climate transition commitments, be actively engaged if they do not
progress or be subject to divestment.
e) LEED certified, and green building allocation within Addenda’s Eco-Social Commercial Mortgages Fund.
f) We also include allocations to climate solutions (e.g. green bonds focused on climate) made on behalf of our net-zero clients that may be outside of these funds
Target(s):
Portfolio decarbonisation reference target
50% reduction in the portfolio financed emissions (tCO2e per million USD invested) of in-scope AUM.
At least 90% of financed emissions from in-scope AUM are considered net zero, ‘aligned’ or ‘aligning’ with a net zero pathway, or the subject of direct or collective engagement and stewardship actions by 2030.
We are setting a combined target for portfolio alignment with net zero and engagement. We believe this approach aligns best with our active stewardship strategy which seeks to achieve real world impact through a feedback loop of monitoring progress and strategic engagement. We will endeavor to disaggregate these targets in the future.
Allocation to climate solutions target
We are targeting a $3.5 billion USD allocation to climate solutions by 2025.
GHG scopes included:
Our initial decarbonization targets cover Scope 1 and 2 emissions only; we expect disclosure and methodologies on Scope 3 emissions to improve and over time will be phased into our targets.
Methodology:
Net Zero Asset Owner Alliance Target Setting Protocol
Net Zero Investment Framework
Scenario(s):
Our emissions reduction targets of 50% by 2030 are broadly aligned with the IPCC SR1.5°C no/low overshoot pathways, as recommended by the Net Zero Asset Owner Alliance.
Additional information
Proportion of AUM committed:
The 15% AUM includes only the funds of our clients’ that have formally asked us to partner with them to manage their assets in line with a net zero by 2050 climate goal. Our aspiration is that by 2030, 75% of our total assets are managed in line with the attainment of net zero emissions by 2050 or sooner. This will depend on our clients’ aspirations and goals. Clients representing approximately half of our AUM have either recently set these goals or are favorably disposed to them, so we believe our aspirational goal is attainable. We will be increasing our support to these and future clients in setting and meeting net zero goals.
Policy on coal and other fossil fuel investments:
No. For clients who have committed and set net zero goals, we will work together to develop and support a policy on thermal coal.
Further information:
2021 TCFD Report
Addenda Climate Transition Equity Funds
Addenda Impact Fixed Income Fund
Addenda’s focus areas on creating systems change and promoting sustainable financial markets
Our carbon reduction, engagement and climate alignment goals and targets apply to those clients that explicitly request us to work with them on their net-zero climate goals.