IFM Investors Pty Ltd
IFM Investors Pty Ltd is a global institutional investment manager headquartered in Melbourne with offices in Sydney, New York, London, Berlin, Tokyo, Hong Kong, Seoul, Zurich, and Amsterdam. It joined the Net Zero Asset Managers Initiative on 11 December 2020 and its initial target disclosure was published on 1 November 2021.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
43% of total AUM (USD $55.9 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Portfolio decarbonisation reference baseline
Carbon footprint (financed emissions) = 3,014,357 tCO2e3
Portfolio decarbonisation reference target
Reduce Scope 1 & 2 emissions by at least 1.2 million tonnes of CO2e in the infrastructure asset class by 2030. This represents an absolute 40% reduction in emissions from the 2019 baseline of IFM’s infrastructure asset class. This reduction target will be adjusted annually to reflect both divestments and acquisitions.
GHG scopes included:
Scope 1 & 2 financed emissions
Net Zero Investment Framework
The final target for the infrastructure equity asset class is based on the IEA NZE scenario. The IEA NZE estimates global CO2 emissions (aggregated across sectors) will have to reduce by ~40% by 2030, against a 2019 baseline. The 2021 NGFS Net Zero 2050 Scenario (Global) projects CO2 emissions reduction of 34% by 2030 (from 2020 baseline).
Proportion of AUM committed:
In September 2021, IFM announced an interim 2030 emissions reduction target and sectoral investment restrictions for our infrastructure equity asset class. The strategy for the infrastructure equity asset class is the most progressed, and it represents our largest asset class by AUM and has been the focus of our first stage of work since announcing our commitment to target net zero emissions across all asset classes by 2050.
For other asset classes in which we manage investments, (listed equities, infrastructure debt and diversified credit), the majority of our portfolios are managed on behalf of individual clients under Investment Management Agreements (IMAs). While our intent is to manage these portfolios in line with net zero, additional client engagement and approval is required before we can commit and include these portfolios in our initial target commitment. Additional work is also required to address issues with data availability and quality in these asset classes, as well as the lack of climate aware benchmarks for Australian passive equities portfolios. This work is well underway and we anticipate being able to announce more detailed targets and commitments for these asset classes, as well as for private equity, by the end of 2021.
Policy on coal and other fossil fuel investments:
Across IFM’s infrastructure equity portfolios we will not make new investments in assets that derive more than 20% of their revenues from the production or transport of thermal coal, or its use in electricity or heat generation. We are also committed to phasing out exposure to thermal coal revenues from our infrastructure portfolio by 2030, in line with IPCC guidance for developed economies. IFM will continue to consider investments in oil and gas related infrastructure. However, in line with the IEA NZE scenario, we will not make investments in infrastructure that would facilitate material new upstream extraction of oil and gas.
Target setting: Credible, science-based 1.5°C climate scenarios generally point to the need for a 40-50% reduction in emissions by 2030 on a 2019 baseline.
In determining our target for infrastructure, we considered this top-down requirement, while also taking account of the energy and emissions profile of the assets in our portfolio and the decarbonisation options available to the highest contributors of emissions – to understand as best we can, the decarbonisation the assets can achieve using existing technologies.
We also undertook modelling to forecast the likely contribution of the decarbonisation electricity grid in the regions where our assets are located. Several of our portfolio assets already have existing transition and targets in place. So we have designed a custom SBT alignment tool and provided this to assets to use in assessing the adequacy of initiatives and targets.
We believe our 40% reduction target constitutes a ‘fair share’ in light of the asset class it applies to, and the emissions profile and use case for the assets in our portfolio. Infrastructure is a challenging sector to decarbonise given the essential nature of the services it provides (i.e. heating, electricity, transportation, etc.), long asset lives and the lack of clear policy settings in several jurisdictions in which our assets are located. We are also committed to reporting on our progress annually and reviewing our commitments and targets every three years in response to updated guidance and available technologies or policy settings.
We publicly announced our commitment to targeting net zero emissions across all asset classes in October 2020 and the media release is available on our website here.
We have also publicly announced our 2030 target and strategy for the infrastructure equity asset class, with the media release and fact sheet available for download from our website here.