Ethical Partners Funds Management
Ethical Partners Funds Management is a boutique Australian funds management company. Ethical Partners is a bottom up, long only stock picker with a focus on ethical investing. Ethical Partners joined the Net Zero Asset Managers Initiative in November 2021 and made its Initial Target Disclosure in November 2022.
25% of total AUM
initially committed to be managed in line with net zero
USD $0.3 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
Portfolio coverage baseline
53% of AUM in material sectors considered at least “committed”
Portfolio decarbonisation reference baseline
For the Ethical Partners Australian Share Fund, the baseline year portfolio emissions was 1,004,813 tCO2e weighted total emissions Scope 1 and 2.
For the Ethical Partners Australian Share Fund, the baseline year performance was 148 tCO2e/$1 million sales in June 2021 (WACI)
Engagement threshold baseline
Across the Ethical Partners Portfolio’s 53% of companies have net zero commitments and so are considered at least “‘committed”.
100% of Ethical Partners portfolio companies are engaged with in relation to climate change and their net zero/decarbonisation pathways on an ongoing basis as part of our active engagement and stewardship process. Please see our engagement report for more details. Please also see our stewardship policy here. These engagements are undertaken directly with the management and boards of 100% of our portfolio companies. They are also undertaken as part of the Climate Action 100+ initiative. This engagement with companies also entails active engagement around our shareholder voting as well. Our voting record is also available on our website.
Allocation to climate solutions baseline
Approximately 10% of the portfolio its currently allocated to climate solutions.
Portfolio coverage target
53% of AUM in material sectors is considered “net zero”, “aligned”, “aligning” or “committed”‘ by 2026: 75% of AUM in material sectors is considered “net zero”, “aligned”, “aligning” or “committed” by 2030
Portfolio decarbonisation reference target
For the Ethical Partners Australian Share Fund, the target for 2030 is 502,407tCO2e (50% reduction from the baseline year).
For the Ethical Partners Australian Share Fund Target WACI is 74tCO2e/$1 million sales (50% reduction from the baseline year).
Engagement threshold target
75% of companies will be at least committed, aligned or aligning by 2030.
As they are now, 100% of portfolio companies will remain subject to active climate engagement.
Allocation to climate solutions target
By 2030, approx 25% of AUM committed to be allocated to climate solutions.
GHG scopes included:
We track Scope 1 and 2 emissions across all AUM, including the mandates that are not yet covered by a net zero target in order to engage with the Asset Owners, and to manage portfolio risk and engage with the portfolio companies on their decarbonisation. We track Scope 3 emissions where available and are engaging with all companies who do not yet disclose Scope 3. These emissions are all tracked on a monthly basis using MSCI data.
Net Zero Investment Framework
The rationale for the Ethical Partners Australian Share Fund comes from the recommended emissions reductions to align with the 1.5C Paris Agreement goal, and on the IPCC special report on global warning of 1.5c, with no or limited overshoot.
Proportion of AUM committed:
Due to mandate restrictions we are unable to set a formal target on the remaining AUM, however we are continually engaging on climate change, climate related risks and opportunities and our philosophy on our own net zero goals with these mandate clients, to encourage them to also consider setting their own targets, as they determine appropriate.
Policy on coal and other fossil fuel investments:
Yes. The Ethical Partners Australian Share Fund and the Net Zero 2030 mandate covered under this initiative (0.3 billion) both have exclusions for all fossil fuels (coal, oil and gas).