Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Achieved CarbonNeutral® certification by Natural Capital Partners.
• Fully offsets its GHG emissions in recognised offset schemes, combining green energy funding and forestry protection and renewal.

Social Achievements

• Launched the River and Mercantile GREF (Global Responsible Equity Fund).
• Supported the “Critical NHS” charity.
• Supported a range of charities in the US and Australia.
• Improved median and mean gender pay gap from 2019 to 2020.
• Increased the number of women receiving a bonus from 87.7% to 94.6%.

Governance Achievements

• Established an ESG Committee.
• Updated and enhanced voting and engagement policies to comply with Shareholder Rights Directive II (SRD II).
• Appointed an independent Authorised Corporate Director (ACD).

Climate Goals & Targets

Environmental Challenges

• Lower performance fees earned due to falling gilt yields and challenging market conditions.
• Difficult market conditions impacting asset raising and winning new institutional and wholesale assets.
• COVID-19 pandemic impacting working practices and client engagement.

Mitigation Strategies

• Swift action taken in Q1 2020 to reduce risk in Fiduciary portfolios.
• Significant investment in distribution capabilities.
• Seamless move to remote working environment.
• Development of new investment strategies (e.g., European Fund, Global Responsible Equity Fund).

Supply Chain Management

Responsible Procurement

• Expect suppliers to uphold human rights.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Stewardship Code 2012, UN Principles for Responsible Investment (UN PRI)

Certifications: CarbonNeutral®

Sustainable Products & Innovation

• Global Responsible Equity Fund (GREF)

Awards & Recognition

• LDI Manager of the Year (Pensions Age Awards 2020)
• Fiduciary Manager of the Year (Professional Pensions UK Awards 2020)
• A+ Strategy & Governance rating from Principles for Responsible Investment (PRI)

Environmental Metrics

ESG Focus Areas

• Responsible Stewardship
• People
• Community
• Environment
• Innovation

Environmental Achievements

• Switched tariffs to a renewable energy provider where possible
• Conducted a green audit of the entire business, including Scope 3 emissions
• Implemented facilities management approaches to reduce the carbon footprint within offices
• Reduced printing requirements
• Encouraged staff to use public transport for client meetings
• Utilized video conferencing to reduce travel

Social Achievements

• Held quarterly Townhall meetings for employee updates and Q&A with senior management
• Undertook employee engagement survey with 87% response rate
• Implemented a flexible working plan
• Rolled out compulsory unconscious bias training for all staff and new joiners
• Rolled out inclusive leadership training for managers and leaders
• Launched a Diversity Policy
• Renewed membership of the Diversity Project
• Signed up to the Women in Finance Charter

Governance Achievements

• Created a new Group Head of ESG role and reviewed the ESG Committee structure
• Implemented a robust framework for engagement activities, achieving recognition by the UK Financial Reporting Council under the Stewardship Code 2020
• Made the Net Zero Asset Managers Commitment (NZAM)

Climate Goals & Targets

Environmental Challenges

• CMA retender process and COVID-19 impact delayed new business activity in Solutions
• Fee margin compression in Fiduciary Management
• Headwinds in UK and Australian Institutional Equity markets
• Short-term disruptions in Solutions pipeline due to uncertainty around future ownership

Mitigation Strategies

• Invested in distribution capabilities, resulting in increased AUM
• Strong investment performance offset fee margin compression
• Focused on cost-saving initiatives
• Developed alternative sourcing strategies
• Continued to invest in existing investment teams and launched new products

Supply Chain Management

Responsible Procurement

• Expect suppliers to uphold human rights
• Surveyed largest suppliers for compliance with Modern Slavery Act

Climate-Related Risks & Opportunities

Physical Risks

• Damage to assets from extreme weather events
• Reduced asset performance due to changing long-term weather patterns

Transition Risks

• Changes in energy prices
• New environmental or carbon taxes
• Changes to investor preferences
• Increased stakeholder concern for failing to comply with ESG or climate requirements
• Ongoing requirement for compliance at a corporate entity level

Opportunities

• Growth in demand for renewable energy investments
• Revenue opportunities from investments in renewable energy market
• Investor desire for climate-friendly investment strategies/products
• Reduced operating costs and increased production capacity at investee companies

Reporting Standards

Frameworks Used: TCFD, UNPRI, UN Global Compact, GRESB, CDP, TPI, FRC Stewardship Code 2020

Certifications: Cyber Essentials

Third-party Assurance: Be Zero Carbon

UN Sustainable Development Goals

• Goal 13 (Climate Action)

Stewardship activities, emissions reduction, and net zero commitment

Sustainable Products & Innovation

• SFDR Article 8 and Article 9 strategies

Environmental Metrics

ESG Focus Areas

• Responsible company and manager
• Meeting the needs of clients and investors
• Environmental impact reduction
• Community contribution
• High standards of integrity, transparency and corporate governance
• Inclusion, diversity, and equal opportunity

Social Achievements

• Supported community through philanthropic partnerships, paid internships and encouraging employee volunteering.
• Improved workforce diversity (details not quantified).

Governance Achievements

• Adoption of UNPRI by key subsidiaries.
• Becoming signatories to the UK Stewardship Code.
• Operation of a Sustainability and Stewardship Committee.

Climate Goals & Targets

Environmental Challenges

• Persistent net outflows from UK equities funds.
• Challenging market conditions for asset management.
• Adverse markets.
• Operating multiple systems across multiple subsidiary and associate companies.
• Managing multiple service providers.

Mitigation Strategies

• Cost cutting in equities business.
• Exiting early-stage or loss-making businesses.
• Consolidation of asset management activities.
• Development of a detailed controls framework.
• Consolidation to a single operating model.
• Rationalisation of service providers.

Supply Chain Management

Responsible Procurement

• Expectation that significant service providers have policies consistent with AssetCo's ESG Policy.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI, UK Stewardship Code