Back in November, we looked at the Paris Agreement. The US had just officially withdrawn, although thankfully, that decision has now been reversed by President Biden. The key long-term goal of the agreement is to restrict the increase in global average temperature to well below 2°C (3.6°F) above pre-Industrial levels. The aspiration is to limit the temperature rise to 1.5°C as this achievement would substantially reduce the risks and effects of climate change. 

We also shared a paper, written by Sarasin’s Head of Stewardship, Natasha Landell-Mills, setting out the expectation that directors and auditors deliver accounts that properly reflect the impact of achieving net zero emissions by 2050 on assets, liabilities, profits and losses.

Net Zero Commitment 

In a move that formalises their intention, Sarasin have signed the Net Zero Asset Managers Commitment, pledging to support the goals of the Paris Agreement. This means they will press the companies where they invest YOUR money to deliver emissions reductions aligned with the Paris Agreement. They are using their influence as shareholders to engage with the companies to drive change.  

Specific commitments of the initiative include: 

• Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management  
• Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner 
• Review interim targets at least every five years, with a view to ratcheting up the proportion of assets under management covered until 100% of assets are included. 

Sarasin are one of 30 founding signatories. Other well-known brands include: AXA Investment Managers, Fidelity International, Legal & General Investment Management, M&G plc, Schroders and UBS Asset Management. 

Climate pledge 

This move builds on Sarasin’s existing Climate Pledge, launched in January 2019, which committed to:

• Press companies they invest YOUR money with to align with the Paris climate goals 
• Influence companies materially exposed to climate risks to position their businesses for a net-zero emission world through: 
• Proactive engagement  
• Voting  
• Divestment  
• Promote policy reforms to drive alignment with the Paris goals through: 
• Policy outreach  
• Public statements  

Change starts at home 

It turns out that Sarasin also practise what they preach, promoting the Paris goals not just through their stewardship of the companies you invest in and their broader policy outreach but by also aligning their own business with the details of the agreement.  

Robust environmental initiatives in place within their own business include: 

• When travel is permitted, using the most environmentally friendly form of transport; using video conference where possible; and planning business trips to maximise the number of meetings per trip to lessen the environmental impact. 
• Recycling of general waste at source – 7,800kg mixed recycling and 70kg glass recycling over the last year. 
• Prioritising efficient energy consumption and the use of environmentally friendly building materials free from any health risk. 
• PIR sensors switch lights off after 15 minutes of no usage; showers have cut off timers installed; and coffee machines switch off after two hours of non-use.  
• 100% renewable electricity has been in use since April 2017 and since 2019 their gas supply has been 100% ‘carbon offset’ to reduce the environmental impact.

If you’d like to find out more about the specific actions Sarasin are taking you can read their Corporate Social Responsibility Report.

It’s probably a good time to point out that we’re also taking what steps we can to improve our own carbon footprint. I am currently in a wide-ranging discussion with senior executives within the IWG Group who own Regus about a range of environmental topics. These include the ridiculous fact the lights in the common areas of our office building remain on 24/7; that the recycling bins provided are seemingly emptied into the same black bag as everything else; and whether they have a ‘renewable’ energy supplier. It’s a good feeling engaging with such a big firm and realising we might just be able to make a difference! 

Looking ahead 

Of course, over the last year, working and travel patterns have been severely impacted by the pandemic. When asked about their future plans for business travel once the option is again available, Sarasin acknowledged that there would likely be a long-term reduction in air travel (one of the biggest contributors to their carbon footprint) but it is unlikely to be completely removed from the way they work. Meeting management teams and visiting investee companies (and potential investee companies) provides them with valuable insight and they see it as an integral part of their role as stewards of your capital.  

Although the last year has certainly provided a reminder of just how much can be done remotely, I for one am keen to get back to ‘real’ face-to-face meetings. (Apart from anything else, I miss the biscuits!)