Climate Change Data

Environmental Metrics

ESG Focus Areas

• Water Use

Environmental Achievements

• Heineken achieved a 33% reduction in water consumption in its breweries over the past decade, resulting in €15m in savings.
• Shiseido achieved an 81% decrease in water consumption at its French factory by switching to alcohol-based cleaning.
• Pepsico ensured that 99% of operational wastewater met internal standards (more stringent than local regulations) three years ahead of schedule.
• Heineken treats 97% of its wastewater.
• Burberry procures 78% of its cotton sustainably and is on track to increase this to 100% by 2022.

Social Achievements

• Kao developed a range of home and personal care products requiring around 20% less water.
• Unilever launched products designed to reduce water consumption in consumer use (clothes freshening sprays, quick rinse conditioners, no-rinse products).

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Excessive water consumption (freshwater withdrawals) and pollution associated with wastewater.
• Water scarcity and rising water prices.
• Supply chain disruptions due to water issues.
• Regulatory challenges and reputational risks.
• Difficulty in implementing solutions due to localized water issues (too much or too little water).
• Addressing domestic water use (consumer use of products).

Mitigation Strategies

• Global water risk assessments and case-by-case initiatives.
• Re-calibrating local areas (reforestation, landscape restoration).
• Investing in technology to reclaim and recycle water.
• Redesigning breweries' water networks to address leaks.
• Developing products designed to use less water.
• Implementing comprehensive pre-emptive actions to prevent wastewater pollution.
• Investing in wastewater treatment plants.
• Making product ingredients and formulations biodegradable.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sourcing certified organic cotton (Burberry).

Climate-Related Risks & Opportunities

Physical Risks

• Water shortages

Transition Risks

• Rising water prices
• Regulatory changes

Opportunities

• Developing water-efficient products
• Cost savings from reduced water consumption

Reporting Standards

Frameworks Used: CDP's Water Disclosure Project

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Kao's water-efficient home and personal care products.
• Unilever's water-saving consumer products.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Human Rights
• Governance

Environmental Achievements

• Measured progress against interim net zero targets; identified three companies as having progressed to being “aligned” with net zero, and three companies that advanced to the “aligning” stage.

Social Achievements

• Strengthened commitment to the abolishment of Modern Slavery; updated Responsible Investment and Engagement Policy to reflect this commitment; strengthened partnership with CCLA and other members of Find It, Fix It, Prevent it.

Governance Achievements

• Improved existing policies; reviewed and responded to upcoming regulation; reflected on the appropriateness of governance structures; worked with clients and consultant partners to understand how to best serve their interests; Formalised engagement framework.

Climate Goals & Targets

Environmental Challenges

• Transition risks including reputational risk, litigation risk, increased operating costs, rising R&D costs and reduced demand for products and services because of shifts in consumer preferences.
• Ensuring that investee companies meet required net zero objectives.

Mitigation Strategies

• Enhanced ESG training; introduction of ESG database (Sentinel); establishment of ESG Committee; measurement and monitoring of carbon metrics for investee companies and portfolios; publishing of TCFD report; becoming a signatory of NZAM; targeted engagement with management.

Supply Chain Management

Responsible Procurement

• Engagement with companies on ethical supply chains and modern slavery

Climate-Related Risks & Opportunities

Transition Risks

• Reputational risk
• Litigation risk
• Increased operating costs
• Rising R&D costs
• Reduced demand for products and services

Opportunities

• Development of energy-efficient products and services; anticipating consumer demands for sustainable products.

Reporting Standards

Frameworks Used: PRI, TCFD, PAII Net Zero Investment Framework, UK Stewardship Code 2020, SFDR

Environmental Metrics

ESG Focus Areas

• Greenhouse gas emissions reduction
• Supply chain sustainability
• Scope 3 emissions

Environmental Achievements

• AG Barr achieved 100% recycled material bottles by 2022

Social Achievements

• Diageo's supply chain engagement with smallholder farmers is inclusive by design, working with Care International.
• Unilever's smallholder projects focus on soil preservation and improved productivity.

Governance Achievements

• Increased transparency within the luxury fashion industry through collaborations like 'The Italy Project'

Climate Goals & Targets

Environmental Challenges

• Difficulty in measurably reducing greenhouse gas emissions, especially Scope 3 emissions within the supply chain.
• High percentage of Scope 3 emissions for many companies (e.g., 90% for Heineken and Burberry, 98% for Unilever).
• Lack of control over emissions from suppliers, particularly small and medium-sized enterprises (SMEs).

Mitigation Strategies

• Collaboration with suppliers to reduce emissions.
• Transitioning to recycled materials (e.g., recycled plastic).
• Providing technical and strategic support to suppliers.
• Initiatives to support smallholder farmers (e.g., Unilever's and Diageo's projects).
• Increased transparency and data sharing within supply chains.
• Innovation in product design (e.g., Kao's ultra-concentrated detergents).

Supply Chain Management

Responsible Procurement

• Collaboration with suppliers to reduce emissions.
• Support for smallholder farmers.
• Technical and strategic support for suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity
• Soil erosion

Transition Risks

• Increased carbon pricing
• Regulatory changes

Opportunities

• Innovation in product design and supply chain management.
• Strengthening supply chain resilience.

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol

Sustainable Products & Innovation

• Kao's ultra-concentrated laundry detergents
• AG Barr's 100% recycled bottles