Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Biodiversity
• Diversity, Equity, and Inclusion
• Governance

Environmental Achievements

• Continued the 2022 Carbon Disclosure Project (CDP) Science-Based Targets initiative (SBTi) campaign, supporting engagement with high-impact companies on committing and setting a 1.5°-aligned SBTi-approved science-based emission reduction target.
• 43% of in-scope assets are "Net Zero Aligned" as of December 31, 2022, a 7% increase from the baseline and 3% over the target pathway.
• Improved wildfire prevention and water quality at Pacific Gas and Electric Company.
• Reduced methane emissions by 70% at EQT through replacement of old pneumatic devices.
• Sempra Energy reduced methane emissions by 37% and on pace to exceed the state’s goal of 40% by 2025.

Social Achievements

• Joined PRI’s Advance initiative, engaging companies in the mining and renewables sectors on human rights and social issues.
• Engaged with Meta Platforms on responsible online content issues and the growing usage of artificial intelligence in content moderation.
• Engaged with Teleperformance on the treatment of content moderation employees, leading to the company exiting the most egregious segment of its global content moderation operations.
• Supported WaterAid Australia, facilitating access to improved water, sanitation and hygiene services in Timor-Leste.
• Engaged with companies on human rights and social issues, including child labor, community relations, forced labor, and supply chain labor management.

Governance Achievements

• Updated ClearBridge Proxy Voting Guidelines to withhold votes from director nominees on nominating committees lacking racial/ethnic diversity.
• Engaged with Cellnex to encourage a fiscally responsible strategy, resulting in a commitment to an investment grade credit rating and strategic changes in capital allocation.
• Engaged with UnitedHealth Group on governance changes, leading to board turnover, separation of chairman and CEO roles, and elevated board oversight of ESG initiatives.

Climate Goals & Targets

Environmental Challenges

• Decreased ESG assets under management in 2022 due to increased scrutiny and refined methodology for counting ESG assets.
• Difficulty in gathering, assessing, and comparing data on principal adverse impacts for EU SFDR Level 2 requirements.
• ESG investing underperformed in 2022 due to market conditions favoring fossil fuel companies.
• Misperceptions about ESG investing, including its novelty and focus on divestment.
• Concerns about greenwashing and the need for greater transparency.

Mitigation Strategies

• Welcoming the push for enhanced disclosures and vetting of sustainable approaches to avoid greenwashing.
• Expanding active role in addressing urgent sustainability challenges.
• Introducing Engage for Impact initiative to encourage more targeted and impactful engagements.
• Clarifying myths and realities about ESG investing, emphasizing its long history and focus on long-term value creation.
• Offering investors a range of investment products with varying levels of ESG emphasis.

Supply Chain Management

Responsible Procurement

• Considering supplier diversity, quality, and risk in sourcing process.
• Working to increase sourcing from women-owned businesses.

Climate-Related Risks & Opportunities

Opportunities

• Investments in renewable energy, electric vehicles, and energy efficiency solutions.

Reporting Standards

Frameworks Used: TCFD, SASB, UNGC

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 6
• SDG 7
• SDG 10
• SDG 12
• SDG 13
• SDG 14
• SDG 15

ClearBridge uses the SDGs to help assess which companies are contributing to or detracting from addressing some of the world’s most pressing challenges. Many themes targeted by ClearBridge ESG analysis and company engagements correspond to the SDGs.

Awards & Recognition

• Named to P&I’s Best Places to Work in Money Management annually since 2012.