Capital Four
Capital Four is independent credit asset management boutique headquartered in Denmark. They joined the Net Zero Asset Managers Initiative in December 2022 and made their Initial Target Disclosure in December 2023.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
6% of total AUM (USD $1.05 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
457 tCO2e/m USD invested
Portfolio coverage baseline
1% of AUM in material sectors covered by the Net Zero Asset Managers Commitment Statement is classified as ‘Aligned’. 36% of AUM in material sectors covered by the Net Zero Asset Managers Commitment Statement is classified as ‘Aligning’.
Engagement threshold baseline
0.001% of the financed emissions in material sectors covered by the Net Zero Asset Managers Initiative Statement are net zero or aligned. Issuer engagements in line with Capital Four’s Net Zero Strategy had not started at the date of the Initial Target Disclosure.
Target(s):
Portfolio coverage target
5% of AUM in material sectors covered by the Net Zero Asset Managers Commitment Statement is classified as ‘Aligned’ by 31 December 2028. 40% of AUM in material sectors covered by the Net Zero Asset Managers Commitment Statement is classified as ‘Aligning’ by 31 December 2028.
This target will be updated every fifth year. The targets apply on total AUM covered by the Net Zero Asset Managers Commitment Statement level and to each sub-portfolio as part of this AUM.
Engagement threshold target
Financed emissions net zero or aligned / under engagement: 70% of AUM covered by the Net Zero Asset Managers Commitment Statement invested in material sector companies to be classified as ‘Net Zero’, ‘Aligned’ or subject to direct or collective engagement by 31 December 2028.
The target applies on total AUM covered by the Net Zero Asset Managers Commitment Statement level and to each subportfolio as part of this AUM.
Portfolio decarbonisation reference target
-50% for 2030
Portfolio emissions intensity calculated as Inflation Adjusted Weighted Average Carbon Intensity (tCO2e/m EUR revenue).
Capital Four’s interim 2030 target is to reduce the inflation adjusted Weighted Average Carbon Intensity (“IA WACI”) of the AUM covered by the Net Zero Asset Managers Commitment Statement by 50% compared to 2020 IA WACI levels.
GHG scopes included:
The inflation Adjusted WACI used in the targets is based on the inflation adjusted Carbon Intensity measured as Scope 1, 2 and 3 emissions.
Methodology:
Net Zero Investment Framework
Scenario(s):
The interim 2030 target is based on the IPCC special report on global warming of 1.5 degree Celsius, which identifies a 50% global reduction in CO2 by 2030 as the mid-term emission reduction target to limit global warming to 1.5 degree Celsius.
Additional information
Proportion of AUM committed:
Capital Four’s AUM are assets in open-ended funds with liquid, semi-liquid or illiquid strategies, private debt funds, CLOs and assets managed under SMAs, where Capital Four acts as investment manager or a similar role, and where the investment strategy or changes requires the consent of relevant stakeholders.
Capital Four’s initial commitment of 6% of AUM managed in line with the Net Zero Strategy represents 100% of two open-ended funds.
Capital Four commits to increase the AUM managed in line with the Net Zero Strategy. To increase this further, Capital Four will focus on engaging with existing investors/stakeholders with the aim of getting consent to manage such portfolios in line with the net zero commitments.
Policy on coal and other fossil fuel investments:
Capital Four Responsible Investment Policy
Capital Four’s Responsible Investment Policy applies to all investments. As set out in the Responsible Investment Policy, Capital Four does not make direct investments in:
(a) companies which generate more than 10% of revenue from coal (also referred to as thermal coal) mining and coal-based energy production and/or;
(b) companies which generate more than 5% of revenue from artic drilling or from extraction, production, distribution, or storage of oil sands (also known as tar sands).
Based on guidance in U.N-Convened Net-Zero Asset Owner Alliance’s Position Paper on Thermal Coal, Capital Four is committed to phasing out exposure to companies with revenue from thermal coal or coal-based energy production by 2040. The firm wide restrictions in the Responsible Investment Policy will be updated accordingly.
Further information:
Capital Four’s Responsible Investment Policy can be found here: https://www.capital-four.com/documents/capital-four-responsible-investment-policy