Climate Change Data

FSSA Investment Managers

Climate Impact & Sustainability Data (2023)

Reporting Period: 2023

Environmental Metrics

ESG Focus Areas

  • Corporate Governance
  • Climate Change and Decarbonization
  • People and Communities
  • Modern Slavery

Environmental Achievements

  • 78% of assets under management (AUM) reviewed for net-zero ambitions as of October 31, 2023.
  • Developed a centralized engagement tracking system to monitor ESG concerns and actions.
  • Reduced power consumption and increased renewable energy share in Kansai Nerolac Paints.

Social Achievements

  • Engaged with companies on labor rights, food safety, and quality control.
  • Highlighted positive developments in corporate governance in Japan.
  • Visited NGOs in Asia to gain insights into social challenges.

Governance Achievements

  • Engaged with companies on board independence, remuneration policies, and succession plans.
  • Actively participated in proxy voting, engaging in constructive dialogue with companies.
  • Observed positive trends in corporate governance in Japan.

Climate Goals & Targets

Long-term Goals:
  • Align holdings with IPCC's 1.5°C warming goal and net-zero emissions by 2050.
Medium-term Goals:
  • By 2030: Assess 100% of AUM; increase percentage of AUM aligned to net zero by 2050.
Short-term Goals:
  • By 2025: 25% of assessed companies to be aligned to net zero by 2050; 100% disclosure of Scope 1 and 2 emissions; encourage alignment with SBTi.

Environmental Challenges

  • Inaccurate or outdated ESG ratings from third-party providers, especially in emerging markets.
  • Difficulty in quantifying the impact of ESG initiatives.
  • Challenges in decarbonizing portfolios due to varying company progress and timelines.
  • Rising emissions in some portfolio companies despite overall lower intensity.
  • Modern slavery risks across various industries and regions.
Mitigation Strategies
  • Utilizes a bottom-up approach, focusing on in-depth company analysis and direct engagement with management.
  • Emphasizes qualitative assessment alongside quantitative data.
  • Developed a multi-phase decarbonization process with tiered assessments and engagement plans.
  • Focuses on long-term engagement and improvement, rather than immediate penalties.
  • Leveraging FSI’s Modern Slavery Toolkit to identify and address risks.

Supply Chain Management

Responsible Procurement
  • Thorough supply chain audits, including on-site visits.

Climate-Related Risks & Opportunities

Opportunities
  • Development of energy-efficient products (e.g., Midea's R290 air conditioners).

Reporting Standards

Frameworks Used: NZIFIG (Net Zero Investment Framework Implementation Guide)

Sustainable Products & Innovation

  • Midea's R290 air conditioners