SKY Harbor Capital Management
SKY Harbor Capital Management, LLC is an independent SEC-registered investment management firm focused on the management of portfolios and funds of US high yield bonds and loans for a global institutional and private wealth management client base. SKY Harbor joined the Net Zero Asset Managers Initiative in November 2021. They made their Initial Target Disclosure in November 2022.
53% of total AUM
initially committed to be managed in line with net zero
USD $2.36 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
0% of AUM in material sectors is considered net zero, aligned, or aligning.
Portfolio decarbonisation reference baseline
118tCO2e/ $mn invested
Engagement threshold baseline
0% financed emissions net zero or aligned.
0% financed emissions under engagement.
Portfolio coverage target
20% of AUM in material sectors is considered net zero, aligned, or aligning by 2030, 70% by 2040.
Portfolio decarbonisation reference target
-20% portfolio emissions in absolute terms.
-20% portfolio emissions in intensity terms.
Engagement threshold target
20% financed emissions net zero or aligned.
50% financed emissions under engagement.
GHG scopes included:
The high yield universe consists of both public and private entities of various sizes with GHG reporting more typical in the larger public companies. Current coverage is in the 80% range by market value and close to 55-60% by company. SKY Harbor uses ISS ESG for climate data and assessment. ISS ESG collects reported emission data if available and models some companies based on industry exposure for others. That said there are a number of companies that have no data currently and are excluded from ISS ESG portfolio level calculations. Nevertheless we feel the methodologies are sound and the comparative trends over periods are indicative of our actions.
Net Zero Investment Framework
We rely upon ISS ESG’s sectoral decarbonization approach (SDA) which is inspired by the SDA developed by the Science Based Targets initiative and is developed around the IEA scenarios, particularly the Sustainable Development Scenario (SDS), Stated Policy Scenario (STEPS) and Current Policy Scenario (CPS). The ISS-ESG scenario analysis combines the IEA scenarios with the SDA approach by allocating a carbon budget to a company based on its market share and the expected emissions trajectory associated with that sector. We use this information to provide input into the type of companies that can positively benefit the portfolios net zero ambitions over time, always taking into account the need for certain risk taking and the limited companies that currently contribute to the overall ambition.
Proportion of AUM committed:
We have already transitioned every public fund where we manage and control the investment policy to Responsible Investment vehicles incorporating a net zero goal. We will continue to engage with our asset owner clients to advocate moving their portfolios to align with a net zero target over time.
Policy on coal and other fossil fuel investments:
Yes. We understand that most SBTi call for the phaseout of financial support to existing coal assets by 2030 and existing oil and gas assets by 2040. We have accelerated that time frame and already exclude thermal coal and oil and gas investments in our Responsible Investment Strategies, which currently comprises 53% of AUM. The policy can be found here.