Boston Trust Walden
Boston Trust Walden Company is an independent, employee-owned firm headquartered in Boston, Massachusetts serving institutional investors and private wealth clients in the United States. It joined the Net Zero Asset Managers Initiative on 29 March 2021 and its initial target disclosure was published on 1 May 2022.
80% of total AUM
initially committed to be managed in line with net zero
USD $11.8 billion
currently committed to be managed in line with net zero
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio decarbonisation reference baseline
Baseline portfolio emissions: The weighted average carbon intensity of model equity assets was 84 metric tons of CO2e/million dollars of revenue. This compares to the aggregate benchmark weighted average carbon intensity of 181. The average result being that model equity assets were invested in assets that were 54% less carbon intensive than their benchmark.
Portfolio coverage baseline
% of portfolio companies setting a science based target: We do not have a 2019 baseline for this effort. As of year-end 2021, 65% of discretionary client equity investments were invested in companies with some type of emissions reduction goal or target. However, only approximately 8% were invested in companies that had set a science-based emissions target that had been officially recognized by the Science Based Targets initiative.
Target(s):
Portfolio coverage target
In the interim, by 2025, we aspire to have approximately 30% of client equity assets invested in companies with science-based GHG emission reduction targets.
Portfolio decarbonisation reference target
Our secondary target utilises the PAII NZIF Portfolio Decarbonization Reference Target. By 2030, we aim to have 100% of discretionary client equity assets invested in assets with a carbon intensity of at least 50% less than their respective benchmarks in 2019. This is based on Scope 1 and 2 emissions of companies in which we invest. As data quality and associated methodologies improve for calculating Scope 3 emissions, we may evolve our approach.
Engagement threshold target
Our primary target utilizes the SBT Portfolio Coverage method, which includes elements of the PAII NZIF Portfolio Coverage Target and Engagement Threshold types. Our aspiration is that nearly 100% of discretionary client equity assets will be invested in companies with science-based targets by 2040
GHG scopes included:
Primary goal: Regarding our engagement on science-based emissions reduction targets, for most companies, some efforts around reducing Scope 3 emissions are required for a science-based target. Scope 3 emissions reduction targets are required for companies where Scope 3 emissions account for more than 40 percent of the sum total of Scope 1, 2, and 3 emissions.
Secondary goal: Our weighted average carbon intensity (WACI) target is based on Scope 1 and 2 emissions of companies in which we invest. As data quality and associated methodologies improve for calculating Scope 3 emissions, we may evolve our approach.
Methodology:
Net Zero Investment Framework
Science Based Target initiative for Financial Institutions
Scenario(s):
Our primary goal utilises the SBTi Portfolio Coverage method to set targets. Our secondary goal utilizes guidance provided by the Net Zero Investment Framework.
Additional information
Policy on coal and other fossil fuel investments:
Boston Trust Walden uses a multifaceted approach to managing and mitigating climate risk, including through our approach to portfolio construction and active ownership. Our discretionary fossil fuel free (FFF) investment strategies avoid investing client assets in companies whose primary business is to explore, develop, produce, refine, service, distribute, or transport by pipeline fossil fuel resources (coal, oil, and natural gas), or to use fossil fuel resources to generate electricity for public consumption. We avoid coal investments in client portfolios, in alignment with guidance from the Intergovernmental Panel on Climate Change (IPCC) 1.5°C scenario, which states that coal usage should be phased out in OECD markets by 2030, and globally by 2040. We will not invest client assets in companies whose primary business is coal mining, or in companies that are planning or constructing new coal-fired power stations. Further, we will not invest client assets in companies that acquire new acreage, after March 31, 2022, for the purpose of developing tar sands resources.
This policy applies to all equity assets on the Boston Trust Walden approved list of securities.
For discretionary portfolios that do not follow a FFF investment strategy or utilize FFF investment guidelines, as with other portfolio holdings with higher carbon intensity, we utilize an active ownership approach to mitigating climate risk, by encouraging companies to pursue an aggressive path toward a net zero future.
Further information:
Target setting: Engagement forms the core of our commitment as part of the Net Zero Asset Managers Initiative. Our primary goal utilizes the SBT Portfolio Coverage method since we believe broad-based, absolute emissions reductions are the only way to mitigate the risks associated with climate change. As such, we believe all companies should set science based GHG emissions reduction targets and this has guided our engagement efforts for nearly the last decade. Our secondary goal utilizes elements of the PAII Net Zero Investment Framework.