Herald Investment Trust PLC
Climate Impact & Sustainability Data (2021, 2023)
Reporting Period: 2021
Environmental Metrics
ESG Focus Areas
- Environmental
- Social
- Governance
Climate Goals & Targets
Environmental Challenges
- Limited ESG reporting for small companies in various countries.
- Difficulty in enforcing prescriptive policies due to the wide range of company sizes and governance environments.
- Limited influence as a minority shareholder in large companies.
- Decreasing number of companies floating on public markets, leading to increased private equity influence and associated risks.
Mitigation Strategies
- Focus on material ESG risks.
- Non-prescriptive approach to stewardship, adapting expectations to company size and location.
- Engagement with company management, escalating to board level if necessary.
- Participation in market and industry associations to improve market practices and regulations.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Standards
Frameworks Used: UK Stewardship Code, UN Principles for Responsible Investment (PRI)
Reporting Period: 2023
Environmental Metrics
Total Carbon Emissions:22,599 tCO2e (Scope 1&2 reported); 108,238 tCO2e (Scope 1, 2 & 3 estimated)
Scope 3 Emissions:85,639 tCO2e (estimated)
ESG Focus Areas
- Climate Change
Climate Goals & Targets
Long-term Goals:
- 100% of high-risk sectors reporting Scope 1&2 emissions by value by 2040
- 100% emissions reduction plan by value in high-risk sectors by 2040
- 100% of total portfolio reporting Scope 1&2 emissions by value by 2040
- 90% emissions reduction plan by value for total portfolio by 2040
Medium-term Goals:
- 90% of high-risk sectors reporting Scope 1&2 emissions by value by 2040
- 90% emissions reduction plan by value in high-risk sectors by 2040
- 90% of total portfolio reporting Scope 1&2 emissions by value by 2040
- 50% emissions reduction plan by value for total portfolio by 2040
Short-term Goals:
- 60% of high-risk sectors reporting Scope 1&2 emissions by value by 2030
- 45% emissions reduction plan by value in high-risk sectors by 2030
- 60% of total portfolio reporting Scope 1&2 emissions by value by 2030
- 38% emissions reduction plan by value for total portfolio by 2030
Environmental Challenges
- Data limitations in obtaining comprehensive ESG data, particularly for smaller companies in the portfolio.
- Transitional climate risks for some portfolio companies, especially those in high-emission sectors like semiconductors.
- Physical climate risks, such as floods, wildfires, and typhoons, impacting some portfolio companies and their supply chains.
- Uncertainty in government policies regarding climate change and the speed of the transition to a low-carbon economy.
Mitigation Strategies
- Diversified portfolio to mitigate physical risks.
- Engagement with high-emission portfolio companies to encourage reporting and emissions reduction.
- Use of Bloomberg data and industry averages to estimate emissions where direct data is unavailable.
- Focus on investing in companies with low carbon footprints and those offering climate solutions.
Supply Chain Management
Climate-Related Risks & Opportunities
Physical Risks
- Floods
- Wildfires
- Typhoons
Transition Risks
- Changes in climate regulations
- Increased costs of carbon
- Shifting market forces
Opportunities
- Investment in companies providing climate solutions
- Growth of low-carbon technologies
Reporting Standards
Frameworks Used: TCFD