The new St. James’s Place portfolio carbon emissions report is another step on the journey to managing client investments more responsibly.
In its latest progress report to Parliament, the Committee on Climate Change (CCC) is on a mission, calling for the government to “seize the opportunity to make the COVID-19 recovery a defining moment in tackling the climate crisis”.
The report highlights how the pandemic has had a substantial social, economic, and environmental impact on British society. It has also embedded new social norms and reinforced climate-positive behaviours in lockdown, such as increased remote working, cycling and walking.
The call to action from the CCC is now for a green recovery with a clear message to policymakers: “Act courageously – it’s there for the taking.” Investing in climate-resilient and low-carbon infrastructure will be key, with job creation in these industries. The report also highlights the power of responsible investing in transport, digital, energy and agriculture to achieve these aims.
Certainly, the route that the economic recovery takes post-COVID will shape how we tackle climate change and determine the speed at which we move towards net zero carbon emissions. Right now, the coronavirus crisis is putting renewed pressure on those in power to act, while also giving individuals the chance to evaluate how they can align their investments so that we achieve a low-carbon future.
“Understanding climate change risk within client portfolios is increasingly important. It’s crucial that clients are conscious of the impact their investments have on climate change, as well as how carbon risk can affect the value of investments,” explains Rob Gardner, Director of Investment Management at St. James’s Place Wealth Management.
“Right now, we can use investments to not only work towards the Paris Climate Agreement, but also have an impact on other wider issues such as corporate and social governance, as well as greening supply chains.”
Transparency is a crucial first step
As part of the journey to ensure client investments are managed more responsibly over time, St. James’s Place has launched its first quarterly report on the carbon intensity of its portfolios – all of which are involved in the reporting process.
“Transparency and disclosure is vital when it comes to responsible investing. What gets measured, gets managed,” says Sam Turner, Responsible Investment Analyst at St. James’s Place.
“Each quarter, we’ll release new emissions data on the portfolios we manage, be open and engage with fund managers. The key aim is to bring about positive change,” explains Turner.
Important role for the investment industry
St. James’s Place first started monitoring its fund managers – and engaging with them – on environmental, social and governance (ESG) factors six years ago.
And it has encouraged its fund managers to become signatories to the United Nations Principles for Responsible Investment, which works to promote the incorporation of ESG factors into investment decision-making. More than 95% are expected to sign up by the end of the year.
As the UK recovery takes shape post-pandemic, the investment industry has an important role to play maintaining the momentum that has gathered in recent months, where ESG goals are included in any economic revival. With a drop in greenhouse gas emissions and improved air quality as more people worked from home and less overseas travel, it demonstrates there’s potential for social change.
“The coronavirus crisis reinforces our conviction that we should encourage ESG characteristics right across our fund range,” explains Turner.
With more impetus to fund green growth, aggregated finance will be a powerful contributing force. The individual investor can also more easily see the drivers of change and a clearer path to net zero carbon emissions.
If you’d like to learn more about investing responsibly, and how St. James’s Place integrates ESG factors into its investments, get in touch with us today.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.
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