Baillie Gifford
Baillie Gifford is one of the UK’s leading independently owned investment management firms. Baillie Gifford 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
20% of total AUM (USD $60 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
2021 is the first year for which we have a comprehensive view of the current alignment progress of our holdings. As at end-July 2022, we assess 30% by value of our listed equity holdings (accounting for 90% of our AUM) to be “leaders” in terms of commitment to targets and strategies that appear consistent with a global Net Zero/1.5C outcome.
Target(s):
Each committed portfolio will be invested and managed such that by 2030 at least 75% of all holdings, or (for broader portfolios) financed emissions will have robust targets, strategies and performance that demonstrate company-level alignment with an appropriate fair share of a global Net Zero 2050/1.5C outcome. By 2040, all holdings will be so-aligned.
GHG scopes included:
We assess all scopes, with acknowledgement that Scope 3 data is currently weak and incomplete. Committed portfolios will be engaging for alignment with companies accounting for at least 90% of financed emissions.
Methodology:
Own/other methodology
Scenario(s):
We assess holdings’ emissions reduction targets and progress against 1.5°C science-based pathways, such as those offered by SBTi, but seeking to take due account of sector and regional granularities in collaboration with our academic and industry partnerships.
Additional information
Proportion of AUM committed:
Given our active and focused investment approach, we believe our most significant impact will come through fundamental research, stock selection and engagement. It is thus important that any commitments we make are embedded at portfolio level from the outset. Where appropriate, our investment strategies have developed net zero aligned commitments consistent with their philosophy and process. For these strategies, we have then sought (or are seeking) appropriate client consent/notification across both segregated and pooled client assets. We continue work with remaining strategies and expect the quantum of committed assets to increase on a rolling basis as more of our strategies obtain client support for their assets to be managed in this way.
Policy on coal and other fossil fuel investments:
We do not exclude coal and fossil fuel investments from portfolios, but our investment expectation is that these are less likely to offer our clients long-term growth opportunities than cleaner and more efficient technologies. This view is reflected in our portfolio composition: as at end-July 2022, <2% of our listed equity AUM was in companies with >5% revenue exposure to oil, gas, or thermal coal, compared to 10% for the MSCI ACWI. Our stated expectation is that all companies with fossil fuel activities of any materiality need to develop strategies that enable them to flourish on the pathway to net zero, as we believe this is critical to maintaining their competitiveness over our investment time horizon. When we invest in such companies, we engage relative to this expectation. Where specifically requested by dedicated client mandates, we do apply screens that limit, or prevent, ownership of such assets.
Further information:
Our 2022 Climate Report which details our investment beliefs, our investment approach, our climate-related commitments, and the current climate-related status of the investments we make on behalf of our clients can be found here