Espiria Asset Management
Espiria is part of East Capital Group. Espiria 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
60% of total AUM (USD $0.37 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio coverage baseline
As of December 31, 2019, 8.1% of in-scope AUM (in material sectors) is at least committed to aligning towards a net zero pathway. As of September 30, 2022 the number is 31.4% of in-scope AUM.
Portfolio decarbonisation reference baseline
44.7tCO2e/$mn revenue
Engagement threshold baseline
0% of financed emissions in material sectors were subject to direct or collective engagement and stewardship actions.
Target(s):
Portfolio coverage target
70% of in-scope AUM invested in assets in material sectors that are i) achieving net zero, ii) ‘aligned’ or iii) ‘aligning’ to net zero.
Portfolio decarbonisation reference target
By 2030, achieve a 50% reduction in carbon intensity v.s. 2019 baseline, as measured by weighted average carbon intensity (WACI), tonnes CO2e/$mn revenue.
Engagement threshold target
Ensure 75% of financed emissions from material sectors aligned to net zero pathways or under active engagement.
GHG scopes included:
We use Scope 1 & 2 in our commitment targets initially and aim to incorporate Scope 3 metric in the target over time as the data availability improves and companies’ calculation methodology matures. We also plan to actively engage with companies to improve Scope 3 disclosure.
Methodology:
Net Zero Investment Framework
Scenario(s):
1. The IPCC emission pathway as outlined in the IPCC special report on global warming of 1.5°C, assuming immediate action.
The modelled net global GHG emissions reduction from 2019 levels needs to be 43% [34–60%] by 2030 and 84% [73–98%] by 2050 in pathways that limit warming to 1.5°C (>50%) with no or limited overshoot (high confidence).
2. One Earth Climate Model (OECM), 2020 for determining sector-specific pathways that can be applied at the portfolio level
Using differentiated targets adjusting for the geographic and sector differences in portfolio construction is considered important, as this ensures a fair share of GHG reduction budget to be considered in determining whether an investment is aligned to the overall net zero target.
Additional information
Proportion of AUM committed:
As of September 30, 2022, Espiria chooses to include listed equity assets in our initial proportion of assets to be managed towards the Net Zero target. Corporate fixed income assets are excluded from our initial commitment. With the anticipation that data availability as well as methodologies mature around green/social/climate/sustainable bonds improve for these assets, we plan to incorporate them into our commitment over time, and update our progress in the next review.
Policy on coal and other fossil fuel investments:
Yes. All in-scope AUM in our target setting follows EC Group Exclusion of Fossil Fuels policy:
Investments shall not be made in any company known to generate more than 5% of revenues from producing, selling and/or
distributing coal products. Investments shall not be made in any company known to generate more than 5% of revenues from the extraction of oil and/or gas, nor in any company whose primary activity is to sell and/or distribute oil and/or gas.
Exceptions may be made for investments in economic activities related to gas, provided that the activities are classified as
environmentally sustainable activities or as transitional activities according to the EU Taxonomy Regulation. Investments shall not be made in any company whose primary activity is to provide services for the extraction of coal, oil and/or gas. No investments shall be made in any company known to be involved in arctic drilling or oil sands.