First Sentier Investors
First Seniter is a world-leading provider of specialist investment capabilities on behalf of institutional investors, pension funds, wholesale distributors, investment platforms, financial advisers and their clients worldwide. They joined the Net Zero Asset Managers Initiative on March 2022 and its initial target disclosure was published on August 2023.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
37.92% of total AUM (USD $59.6 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Portfolio decarbonisation reference baseline
1436.9 tCO2e/$m revenue
Portfolio coverage baseline
While we currently do not have data on asset alignment as at 31 December 2021, we have developed a model to monitor and report progress on alignment going forward.
Portfolio decarbonisation reference target
2030: For our committed Infrastructure strategies only, to decrease portfolios’ GHG intensity by 35 – 50% for Scope 1 & 2 (expressed in metric tons of CO2 equivalent per USD 1 million in revenue) by 2030 from a 2019 baseline.
Portfolio coverage target
For our committed Listed Equities and Bonds strategies ((Australian Equities Growth, Australian Equities Income, Australia Fixed Income, Global Credit, Asia Fixed Income, FSSA)) by 2030, we aim to increase to minimum 50% the percentage of each portfolio’s assets invested in companies that are either “aligned” or “aligning” to net zero.
GHG scopes included:
Scope 1 & 2 emissions of investee companies represent the main data sources into our calculations. In our application of the NZIF we have included scope 3 emissions to the extent possible. Only where Scope 3 emissions are disclosed to the CDP with credible categorisation that would allow us the make decisions made on reasonable grounds, the data is included in our assessments to classify a company in line with the PAII NZIF methodology guidance. Scope 3 is not included for target setting yet and as Scope 3 disclosure and target setting becomes available this will over time be phased into our assessments.
Net Zero Investment Framework
We understand that ‘fair share’ emission reductions will depend on factors such as the existing emissions profile of the investment assets committed to a transition to net zero, the geographic location of the assets and the degree of difficulty associated with the decarbonisation of the assets. As the decarbonisation rate will vary based on sectors and regions, we view that our team-level targets are in line with delivering the fair share 50% global reduction in absolute GHG emissions. This is based on our initial baseline assessments of net zero readiness and pathways of our investee companies. We will continue to monitor the sectoral pathway developments and update this going forward.
Proportion of AUM committed:
Although Stewart Investors is part of FSI, its AUM (USD 25.4 bn as of 31 December 2021) is not included in our net zero target scope as they are a separate signatory to Net Zero Asset Managers Initiative.
Policy on coal and other fossil fuel investments:
FSI has a firm-wide engagement position on Thermal Coal, Tar Sands and Arctic Extraction in our Climate Change Action Plan (2022), which is based on The Institutional Investors Group on Climate Change (IIGCC) Paris Aligned Investment Initiative Net Zero Investment Framework. Although this is not a science-based policy or a firm-wide exclusion policy, this sets out the principles for engagement on these fossil fuel investments.
This position is currently limited to listed entities; and we are in the process of developing an approach to engagement with sovereigns, semi-governments and state-owned corporations. We will review this position periodically in order to reflect most up- to-date thinking (including further thresholds if needed) and information available.
Disclaimer: These targets have been formulated based on: (i) available information and representations made to First Sentier Investors by third parties, including, but not limited to, portfolio companies; and (ii) assumptions made in relation to future matters such as the implementation of government policy in climate-related areas, enhanced future technology and the actions of portfolio companies. Such information and representations may ultimately prove to be inaccurate and such future matters may not ultimately be realised. As such, First Sentier Investors cannot guarantee the achievement of these targets. These targets are subject to ongoing review and may change without notice.