Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Seattle office LEED Platinum certified, 100 ENERGY STAR® score; New York office LEED O+M; Chicago office LEED-CI 1.0; Sydney office NABERS Energy rating 5 stars, NABERS Water rating 3.5 stars; Toronto office LEED Gold; Amsterdam office BREEAM In-Use certified; Lowering energy and water consumption; Managing waste and materials; Using recycled materials; Promoting paperless environments; Hosting sustainable corporate events.

Climate Goals & Targets

Environmental Challenges

• Understanding the complex reach, timing, risk, and opportunities associated with climate change.

Mitigation Strategies

• Devoting material resources to understand and integrate the financial impact of climate change; incorporating climate change impact through ESG components of research rank framework; quantitative research focused on climate change themes (water, resource efficiency); low-carbon strategies targeting climate change risk and opportunities; active ownership practice explicitly targeting climate change.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Certifications: LEED Platinum, ENERGY STAR, LEED O+M, LEED-CI 1.0, NABERS, LEED Gold, BREEAM In-Use

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• USD 8bn investment in accordance with our decarbonisation strategy
• 32% of corporate engagements covering climate issues in 2021
• Voted on 118 climate-change related proposals in 2021
• Partnership with climate risk specialist finalised in 2021
• Active participant of Climate Action 100+

Social Achievements

• Not disclosed

Governance Achievements

• Established governance around climate risks, including development of a climate change policy, addition of climate risk to our risk management dashboard, and identification of individuals responsible for our climate response.

Climate Goals & Targets

Environmental Challenges

• Data challenges for Scope 3 reporting at the asset level
• Significant variation exists in current methodologies for temperature scores
• Complexity and reliance on significant assumptions in climate scenario analysis models

Mitigation Strategies

• Intend to report sovereign emission exposure in subsequent reports
• Will continue to use carbon emission metrics as our primary reference point for target setting and progress tracking, but will consider temperature data as a supplementary reference point
• Consider these inputs to an investment decision-making process, supplemented by other robust sources of information

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events
• Changes in weather patterns, rising temperatures, rising sea levels

Transition Risks

• Changes in cost (price on carbon, costs of abatement)
• Changes in demand (demand destruction and creation arising from shifts in demand)

Opportunities

• Demand creation for climate solutions

Reporting Standards

Frameworks Used: TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low carbon strategies
• Carbon managed portfolios

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change Resilience
• Natural Capital
• Human Capital
• Diversity & Inclusion
• Board Composition & Accountability
• Executive Compensation

Environmental Achievements

• Approximately $10.8bn USD in carbon-managed strategies as of December 31, 2022.
• Phase 1 and Phase 2 of ESG enhancements completed by the end of 2022 on 12 products totaling $7.2bn AUM, including 20% carbon footprint reduction and coal exclusions.

Social Achievements

• Launched two multi-asset portfolios with specific ESG investment objectives in APAC.
• Launched the Russell Investments Institutional Funds (RIIFL) Sustainable Bond Fund in the US to meet client demand for ESG integration in fixed income.

Governance Achievements

• Creation of three full-time ESG positions: Head of Global ESG Strategy, Head of ESG Investment Management, and Head of ESG Research and Development.
• Formalized Executive Committee oversight of global ESG efforts.

Climate Goals & Targets

Environmental Challenges

• Climate risk management is a developing area in financial markets.
• Standardization of ESG reporting in non-equity asset classes is lacking.
• Gaps still exist in ESG data and metrics.
• Evolving regulatory environment in the EU and beyond.

Mitigation Strategies

• Leveraging partnership with a specialist climate risk provider.
• Integrating additional climate risk metrics into investment practices.
• Providing training to associates and clients on climate risk.
• Using improved data and scenarios on climate risk to enhance asset allocation capabilities.
• Strengthening responsible investing practices in fixed income, real assets, private markets, and alternatives.
• Developing new investment solutions to address clients’ ESG needs.
• Providing choice for clients through both “light” and “dark” green sustainable solutions.
• Expanding the list of recommended ESG products.
• Advancing market-leading overlay capabilities.
• Moving beyond carbon-focused metrics to include forward-looking sustainability projections.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• Low carbon funds
• ESG-focused global equity line-up
• Climate credit strategy
• Multi-asset portfolios with specific ESG objectives
• ESG Models

Environmental Metrics

ESG Focus Areas

• Climate Change Resilience
• Natural Capital Management
• Human Capital Management
• Diversity, Equity, and Inclusion
• Board Composition & Accountability
• Executive Compensation

Environmental Achievements

• Launched three new sustainable funds across global markets and asset classes (Sustainable Global Equity Fund, Global Unlisted Infrastructure Fund, Buy and Maintain Fixed Income Fund)
• Approximately $14.4bn in carbon-managed strategies as of December 31, 2023
• Developed a Sustainable Transition Universe to identify investments actively contributing to a more sustainable future
• Enhanced physical climate risk modeling capabilities through partnership with a specialist data provider and in-house GIS expertise development

Social Achievements

• Provided training and development on ESG matters to both clients and internal associates through webinars, conferences, and whitepapers
• Developed a comprehensive ESG curriculum covering foundational ESG principles, analysis, and integration into investment processes
• Increased spending with Women Business Enterprises (WBEs) by 51% in 2023 using Supplier Explorer tool

Governance Achievements

• Refined process for evaluating private markets managers
• Launched a Net Zero Dashboard to support funds with net zero targets
• Expanded metrics available on portfolio management platform
• Developed an internal dashboard to assist in monitoring and reporting fund-level sub-adviser DEI data

Climate Goals & Targets

Environmental Challenges

• Gaps in ESG data and metrics
• Narrow investment opportunities in emerging themes such as natural capital efficiency and biodiversity
• Complexity of transition to a low-carbon economy
• Lack of standardized methodologies for assessing physical climate risk
• Scarcity of ESG-related data for emerging market companies

Mitigation Strategies

• Continued enhancements to ESG data and reporting capabilities
• Closely monitoring emerging themes
• Leveraging partnership with a specialist climate risk provider
• Developing in-house GIS expertise and tools for visualizing physical risk exposure
• Adapting Enhanced Oversight processes across all asset classes and portfolios
• Sourcing proprietary ESG reporting and data directly from sub-advisers

Supply Chain Management

Responsible Procurement

• Supplier sustainability requirements
• Use of Supplier Explorer tool to identify and increase spending with diverse suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Changes in weather patterns
• Rising temperatures
• Rising sea levels

Transition Risks

• Changes in cost and demand due to shifts in the low-carbon economy
• Potential for stranded assets

Opportunities

• Development of energy-efficient products and services
• Investment in climate solutions

Reporting Standards

Frameworks Used: TCFD, UNPRI, SASB

Certifications:

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• Sustainable Global Equity Fund
• Global Unlisted Infrastructure Fund
• Buy and Maintain Fixed Income Fund

Awards & Recognition

• Not disclosed