Sustainability with Substance: Ninety One publishes its Global Environment Impact Report

Global Environment Fund sees 70% of portfolio companies reduce their carbon intensity across Scope 1, 2, and 3 and 70% grow their carbon avoided in 2021

Jul 27, 2022

Global Environment Fund sees 70% of portfolio companies reduce their carbon intensity across Scope 1, 2, and 3 and 70% grow their carbon avoided in 2021

27 July 2022

Ninety One has today published its fourth annual Global Environment Impact Report, which provides its ‘sustainability attribution’ for every holding within the Global Environment portfolio – an assessment of each company’s contribution to a greener future and an appraisal of other environmental, social and governance (ESG) issues.

It has been a challenging 12 months for sustainable investing. However, the report highlights positive progress among the companies in the Global Environment portfolio, in terms of both carbon reporting and environmental impact which evidences what can be achieved by focusing on sustainability with substance.

Deirdre Cooper and Graeme Baker, Co Portfolio Managers, Global Environment: “We have seen further improvements in portfolio companies’ reporting of carbon risk (Scope 1, 2 & 3 carbon emissions) and impact (carbon avoided). Over 95% of companies now report Scope 1 & 2 emissions, and the proportion of portfolio companies providing full carbon-risk reporting is now just over 50%. While carbon reporting is improving, we are seeing some meaningful restatements, particularly of Scope 3 emissions, where a change in methodology can result in very different emissions figures. This can make year-on-year comparisons between companies difficult. The fundamental and qualitative analysis of carbon data continues to be a vital overlay.“.

“Over the past year (i.e., FY2020 vs. FY2019), almost 70% of portfolio companies reduced Scope 1, 2 & 3 emissions intensity, and 70% increased their absolute carbon avoided – a measure of the extent to which a company’s products or services help to reduce emissions relative to the traditional alternative.”

The report also details the investment team’s engagements with portfolio companies, all of which provide products and/or services that contribute to sustainable decarbonisation. “We continue to work towards improved carbon emissions reporting by our portfolio companies, with a focus on Scope 3 reporting, and towards all companies adopting science-based carbon-reduction targets.“.

“We have updated our appraisal against the EU taxonomy and continue to estimate that more than 40% of the Fund’s revenues are potentially aligned to the taxonomy (before applying the ‘Do No Significant Harm’ and ‘Minimum Social Safeguards’ tests). However, as we study the related data from the various external data providers and the handful of companies that have reported, it is becoming increasingly clear that there is quite a bit of room for interpretation in the taxonomy data. Therefore, it will be quite a while before we have consistent numbers across different companies. 17 portfolio companies (c.68%) currently have explicit carbon-reduction targets, and about 42% of portfolio holdings have targets approved by the Science Based Targets initiative (SBTi). This continues to be our key engagement focus.“

“As investors, we don’t seek to appear ‘green’ by minimising our carbon footprint or maximising our ESG ratings. We aim to deliver ‘sustainability with substance’ through an externalities-based approach to research, examining the nonfinancial as well as the financial data and information, assessing each company’s performance in relation to all its stakeholders. That means deep research on the products and services that are helping to avoid carbon. It means studying, within our natural capital analysis, the company’s net zero plan and water data (imperfect though that currently is) and thinking about the company’s and its suppliers’ impact on biodiversity“.

Disclaimer

The value of the shares in the Fund and the income accruing to the shares, if any, may fall or rise. The Fund may use or invest in financial derivatives. Past performance figures shown are not indicative of future performance. Investment involves risks. Please refer to the offering documents for further details, including the risk factors.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon. This communication is provided for general information only. It is not an invitation to make an investment nor does it constitute an offer for sale. Potential investor should read the details of the Prospectus before deciding to subscribe for or purchase the Fund. The full documentation that should be considered before making an investment, including the Prospectus and Product Key Facts Statement (KFS) or Product Highlights Sheet (PHS) (where applicable), which set out the fund specific risks, is available from Ninety One or your financial advisor.

For more information, please contact your bank and financial advisor. Investors may wish to seek advice from a financial advisor before making a commitment to purchase shares of the Fund. In the event that an investor chooses not to seek advice from a financial advisor, he/she should consider carefully whether the Fund in question is suitable for him/her. Informational sources are considered reliable but you should conduct your own verification of information contained herein.

In Hong Kong, this document is issued by Ninety One Hong Kong Limited and has not been reviewed by the Securities and Futures Commission (SFC). In Singapore, this document is issued by Ninety One Singapore Pte Limited (company registration number: 201220398M) and has not been reviewed by the Monetary Authority of Singapore.

Past performance figures shown are not indicative of future performance. Investors are reminded that investment involves risk. Investors should refer to the offering documents for details, including risk factors. This website has not been reviewed by the SFC. 

By clicking on the hyperlink of Investor relations below, you are leaving this website with information specific for retail investors in Hong Kong and entering the global website.

Please note that the global website is not intended to target Hong Kong investors. It has not been reviewed by the Hong Kong Securities and Futures Commission (“SFC”). The website may contain information on funds and other investments products that are not authorised by the SFC and therefore are not available to retail investors in Hong Kong. The website may also contain information on investment services / strategies that are purported to be carried out by a Ninety One group company outside of Hong Kong.

Any product documents and information contained in this website are for reference only and for those persons or entities in any jurisdictions or country where the information and use thereof is not contrary to local law or regulation.

Issuer: Ninety One Hong Kong Limited
Email: [email protected] 
Telephone: (852) 2861 6888 
Fax: (852) 2861 6861