Climate Change Data

Environmental Metrics

ESG Focus Areas

• Mobility
• Energy
• Built Environment
• Food Systems
• Wellbeing

Environmental Achievements

• Global wind capacity continues to grow at double-digit rates annually.
• Installed capacity of solar energy has grown at a 50% CAGR over the last eight years.
• Annual tonnage of post-consumer plastic packaging waste collected for recycling has scaled rapidly.
• Volume of recycled plastics use in end-markets has seen substantial growth since 2010.

Social Achievements

• Number of people in the US exercising regularly has seen a marginal uptick.
• Number of yoga practitioners in the US is increasing rapidly.
• Awareness of the importance of holistic wellbeing is growing.
• Employers increasingly recognize the importance of workplace wellness.

Governance Achievements

• Growth in the global stock of climate legislation, which stands at over 1,200 laws across 164 countries.
• Commitment to an internal price on carbon has increased more than threefold since 2014.
• Global companies committed to solving social and environmental problems are certifying as “B Corporations”.

Climate Goals & Targets

Environmental Challenges

• Risks posed by environmental and social challenges, from climate change to inequality, remain significant.
• Data can be limited in quality and historical duration for many sustainability trends.
• Cost of storage is generally a bigger bottleneck than the cost of production for renewable energy.
• Health inequities linked to socioeconomic status remain pervasive.

Mitigation Strategies

• Businesses are bringing new, more sustainable technologies to market and to ever greater scale.
• The energy-storage industry is rapidly innovating.
• Lower costs mean renewable technologies are becoming increasingly affordable in emerging markets.
• Innovation and capital allocation will need to accelerate to keep up with increasing demands on the global system.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Net zero
• Nature
• Social equity & justice

Environmental Achievements

• Over three-quarters of the global economy is now covered by national-level commitments to net zero.
• Renewables were the only source of electricity generation to grow last year, despite the pandemic.
• Low-carbon electricity supply has surpassed coal.

Social Achievements

• Social equity and justice are central concerns for sustainability.
• Board diversity programmes are becoming increasingly mainstream.
• Many businesses have stepped up for their workers during the pandemic.

Governance Achievements

• The Net Zero Asset Managers Initiative now has 87 signatories with $37 trillion of assets under management.
• Investor engagement with companies on climate change also reached a new level this year.
• Frameworks are emerging to judge the quality and credibility of net-zero plans.

Climate Goals & Targets

Environmental Challenges

• Huge increases in deployment of sustainability solutions are needed to limit global temperatures to 1.5°C above pre-industrial temperatures and to address injustices in society.
• There is a yawning gap between long-term goals and near-term plans.
• The quality of carbon offset markets remains a concern.
• Misleading sustainability claims are spreading online at an alarming rate.

Mitigation Strategies

• The need for safeguards around sustainable investing is a key finding in this year’s report.
• Frameworks for assessing nature and biodiversity impact are urgently needed.
• Regulators need to set a high bar for sustainability claims.
• Companies need credible, near-term plans for net zero.

Supply Chain Management

Responsible Procurement

• Companies have increasingly been making commodity-level commitments to address deforestation.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Deforestation
• Human Rights

Environmental Achievements

• Increased resourcing devoted to the Sustainability Trends Report.
• Achieved 56% of Focus List companies participating in SBTi and/or with 2040 net-zero commitments (up from 43%).
• Early progress on deforestation engagement with Adidas, Amazon, and Samsonite.

Social Achievements

• 99% of colleagues participated in the Generation Foundation’s matched giving programme.
• Global Equity portfolio outperformed benchmark on several human capital metrics (e.g., human capital development score, employee recommendation score).

Governance Achievements

• Revised Stewardship and Engagement Policy to incorporate private market engagement.
• Updated Proxy Voting Principles in 2022.
• Successful multi-year engagement with JLL resulting in improved governance and capital allocation.

Climate Goals & Targets

Environmental Challenges

• ESG backlash in the United States.
• Challenges in sourcing comprehensive EDI data.
• Insufficient progress from proxy advisors on net-zero proxy voting advice.
• Difficulty in measuring portfolio alignment with Paris Agreement goals due to limitations in Scope 3 data.

Mitigation Strategies

• Increased resourcing dedicated to stewardship activities across listed equity, private equity, and Just Climate teams.
• Added Sustainalytics as an ESG research provider for SFDR compliance.
• Active engagement with ISS and Glass Lewis on net-zero proxy voting advice.
• Leadership role in GFANZ workstream on portfolio alignment measurement.

Supply Chain Management

Responsible Procurement

• Supply chain policies prohibiting forced labor (ANTA Sports engagement).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Investment in renewable energy infrastructure, energy-efficient technologies.

Reporting Standards

Frameworks Used: UK Stewardship Code 2020, SFDR, TCFD, Paris Agreement, UN SDGs

Certifications: B Corporation

Environmental Metrics

ESG Focus Areas

• Planetary health
• People health
• Financial inclusion

Environmental Achievements

• WEKA avoided 190.6k tCO2e, a >100% increase from the previous year.
• ServiceTitan avoided 164.4k tCO2e.
• BenchSci avoided 37k tCO2e through its clients' reduced R&D spend.

Social Achievements

• Gloat unlocked over 1.4 million productive hours.
• OneTrust enabled 22.3 million daily consent transactions, protecting customer privacy.
• Four out of five companies reported gender diversity data; two existing investments improved gender diversity year-over-year.

Governance Achievements

• Launched Sustainability Performance Review (SPR) to benchmark companies' performance and provide actionable insights.
• Engaged with portfolio companies on Board composition to improve diversity.
• OneTrust committed to setting a Science-Based Target.

Climate Goals & Targets

Environmental Challenges

• A significant portion of companies’ scope 3 emissions relates to data centre energy consumption.
• Average workforce gender diversity decreased slightly due to the addition of three new portfolio companies with less diverse employee compositions.

Mitigation Strategies

• Encouraging companies to push their data centre partners to source 100% renewable energy and improve Scope 3 data quality.
• Supporting companies to refine their EDI recruitment and retention strategy.
• Onboarding a new Growth Equity advisor to provide direct strategic support for companies on EDI.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), Task Force on Climate-related Financial Disclosures (TCFD), Impact Management Project (IMP), Science-Based Targets (SBT)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3
• SDG 7
• SDG 8
• SDG 9
• SDG 12

Detailed mapping provided in Appendix

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Sustainability
• Social Impact
• Food Security
• Biodiversity

Environmental Achievements

• Significant reduction in coal consumption in the UK, nearing complete phase-out.
• 74% increase in solar panel installations worldwide.
• 50% drop in deforestation in the Amazon compared to the previous year.

Social Achievements

• Increased investment in clean energy exceeding investment in fossil fuels (2:1 ratio).
• Efforts to address global hunger and malnutrition, though progress is hampered.
• Initiatives to improve sustainable farming practices in Great Britain.

Governance Achievements

• Increased focus on mandatory ESG reporting and potential penalties for non-compliance.
• EU's implementation of a carbon border adjustment mechanism.
• Growing number of countries committing to net-zero emissions, though implementation varies.

Climate Goals & Targets

Environmental Challenges

• Backsliding on climate commitments due to political pressure and lack of determination.
• Slow progress in cutting emissions from buildings and industry.
• Rising backlash against climate policies.
• High financing costs for renewable energy projects in developing countries.
• Inadequate public charging stations for electric vehicles.
• Continued high levels of fossil fuel investment and subsidies.
• Global tensions and trade wars impacting the energy transition.
• Lack of progress in cutting emissions from planes, ships, and lorries.
• Rising global hunger and food insecurity.
• Continued deforestation of tropical forests.

Mitigation Strategies

• International agreement to 'transition away' from fossil fuels.
• Commitment to triple renewable electricity installations by 2030.
• Efforts to improve grid modernization and streamline bureaucracy.
• Development of affordable electric car models and expansion of charging networks.
• Increased investment in clean energy technologies.
• Initiatives to reform agricultural subsidies and promote sustainable farming practices.
• EU regulation to ban imports of products from deforested land.
• Development of green steel and hydrogen technologies.
• Efforts to improve the credibility of carbon offsets.

Supply Chain Management

Responsible Procurement

• EU regulation to ban imports of products from deforested land.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, heat waves, droughts, floods

Transition Risks

• Political backlash against climate policies, trade wars, supply chain disruptions

Opportunities

• Growth of renewable energy, electric vehicles, and other clean technologies.

Sustainable Products & Innovation

• Green steel, green hydrogen, heat pumps, electric vehicles, plant-based meat substitutes