Coutts & Co.
Coutts & Company is a private bank and wealth manager with 19 offices across the United Kingdom. It joined the Net Zero Asset Managers Initiative on 20 April 2021 and its initial target disclosure was published on 1 May 2022.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
89% of total AUM (USD $35 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio decarbonisation reference baseline
• Portfolio decarbonisation target: disclosed on an individual fund and portfolio basis, see coutts.com
Portfolio coverage baseline
• Portfolio coverage targets: In scope AUM considered net zero, aligned or aligning in 2019: 0%
• Baselines will be reported publicly on coutts.com and updated dynamically
Target(s):
Portfolio coverage target
Portfolio coverage targets in-scope AUM:
• 50% is considered net zero, aligned or aligning by 2025
Portfolio coverage target
Portfolio coverage targets in-scope AUM:
• 70% is considered net zero, aligned or aligning by 2030
• 100% is considered net zero, aligned, aligning or under engagement to become aligned by 2030
Portfolio decarbonisation reference target
Portfolio decarbonisation target:
• 50% reduction in the weighted average carbon intensity (tCO2e/$M revenue) of in–scope AUM by 2030, compared to a scope AUM by 2030, compared to a 2019 baseline
GHG scopes included:
Our current decarbonisation target is set based on Scope 1 and 2 emissions. We track Scope 3 emissions and aim to report on this and include in our targets when data availability and quality improves. Where deemed material we consider Scope 3 emissions in our engagement with investee companies and fund managers.
Methodology:
Net Zero Investment Framework
Scenario(s):
IPCC special report on global warming of 1.5°C
Additional information
Proportion of AUM committed:
The proportion of AUM in scope covers all core strategies (managed funds and discretionary portfolios). It currently excludes bespoke (customised) discretionary and advisory portfolios, given that those assets are subject to specific conditions/restrictions. Due to our bespoke and advisory mandates being managed in line with clients’ requirements and objectives we do not have full discretion over the net zero trajectory of these mandates. However, we aim to engage with all bespoke and advisory portfolio clients to seek their approval to include these assets in our net zero 2050 goals.
Policy on coal and other fossil fuel investments:
Yes, Coutts, as part of the NatWest Group, is a member of the Powering Past Coal Alliance and our engagement is aligned with the timeframes set out by the PPCA, recognising different trajectories across the world.
Where we have direct control, we do not invest in companies that derive more than 5% of revenue from thermal coal extraction, Arctic oil and gas and unconventional oil and gas (including tar sands), or that derive more than 25% of revenue from thermal coal energy generation.
Where we invest in third-party fund managers we will engage with fund managers to invest in line with the timeframes set out by the PPCA.
Further information:
Target setting: As a globally diversified multi-asset manager our target reduce the weighted average carbon intensity of our investments by 50% by 2030 aligns with the IPCC special report on global warming of 1.5°C and corresponds to a fair share given our exposure to global equity and fixed income markets.
Asset classes in scope are determined based on the availability of data and net zero methodologies at the time of target setting. Our decarbonisation target includes equities and corporate fixed income held directly within active and passive thirdparty funds. Our portfolio alignment targets also include sovereign bonds. Cash is currently excluded due to methodological limitations.
Alignment assessment and engagement: As most of our investment are in third-party funds, we assess the alignment to a Net Zero trajectory on a fund level. Our approach is based on the PAII Net Zero Investment Framework and tailored to our investment process. We are currently undertaking an assessment of all funds we invest in based on their potential to transition and this grouping (Net Zero, aligned, aligning, committed to aligning, not aligned) will guide our stewardship activity and asset allocation process once established. In line with our commitment to affect real world change we will focus on engaging with our existing fund managers to increase their efforts to align with Net Zero. Over time we aim to limit new investment in fund managers which we have assessed as having low/no potential to transition to Net Zero. We also continue to work with the industry, for example through collective engagement bodies and industry working groups, to align stewardship efforts and develop methodologies for remaining asset classes.
Our climate strategy and targets are available here. Our approach to climate change, responsible investing policy, stewardship policy and TCFD statement are available here. Please also see our cautionary note about climate-related data and information.