Brown Advisory is an independent investment management and strategic advisory firm committed to delivering a combination of first-class performance, strategic advice and the highest level of client service with offices in Austin, Baltimore, Boston, the Carolinas, Delaware, Frankfurt, London, Nashville, New York, San Francisco, Singapore, Virginia and Washington, D.C. Brown Advisory 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 $18.9 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Portfolio coverage baseline
Approximately 43% of committed AUM in material sectors considered to be ‘net zero’, or are ‘aligned’ or ‘aligning’ with net zero.
Portfolio decarbonisation reference baseline
Engagement threshold baseline
33% of committed AUM in material sectors currently has an approved science-based target (SBT).
While climate change has been an engagement priority for our ESG research team and sustainable portfolio managers for many years, including supporting CDP’s Science-Based Target Campaign, we will begin formally and comprehensively tracking all our engagements specifically focused on SBTs from 2023. Our baseline, therefore, does not include engagement data at this time.
Portfolio coverage target
A 15% increase in committed AUM in material sectors considered net zero, aligned, or aligning by 2026, and 100% of committed AUM in material sectors considered net zero or aligned by 2040.
Portfolio decarbonisation reference target
For our committed AUM, a 50% reduction in CO2e (scope 1 & 2) emissions by 2030, and net zero emissions by 2050.
Engagement threshold target
90% of committed AUM in material sectors be invested in companies that a) have their own approved science-based targets, or b) are subject to direct or collaborative Brown Advisory engagement to set science-based targets by 2030. By 2040, we will raise this target to 100% of committed AUM.
GHG scopes included:
Our targets cover Scope 1 and 2 emissions.
Net Zero Investment Framework
We have used the United Nations Intergovernmental Panel on Climate Change (IPCC) special report on global warming of 1.5°C as a basis for our target.
Proportion of AUM committed:
Our commitment includes public equity, REITs and corporate fixed income bond (public issuers only) assets included in a majority of our internally managed sustainable strategies. We begin our commitment focusing on sustainable strategies as these are assets our clients have already consented to have managed with a sustainable philosophy.
At this time, we have excluded traditional strategies that do not use an SI philosophy, asset classes other than those listed above, certain recently launched sustainable strategies, and assets managed as part of our advisory business that are not invested in the sustainable strategies included. We will seek to increase the proportion of our assets committed, initially through increasing the proportion of our sustainable strategies committed, including committing additional asset classes.
Policy on coal and other fossil fuel investments:
The strategies that form our NZAM commitment use a sustainable investment philosophy that naturally avoids certain fossil fuel intensive activities. While the strategies that form our commitment may have investments that are active in the fossil fuel industry, the portfolio managers of those strategies would expect such companies to align themselves with the goal of achieving net zero by 2050. As it relates to avoiding elevated ESG risks, our investment philosophy also deters us from investing in companies that are expanding their activities in the dirtiest areas of the fossil fuel sector: specifically, companies that are planning or constructing new thermal coal projects and associated infrastructure (e.g. mining, power) or are moving forward with new tar sands exploration. Consistent with our existing sustainable investment philosophy, long-term view and portfolio concentration, these companies do not typically meet our investment criteria.