Our collaborative endeavour with Ninety One commenced in February 2022, with a shared vision of setting ambitious net-zero targets for our EMMA portfolio. Through rigorous strategy evolution workshops held in July and October 2022, we embarked on a comprehensive examination of our investment processes, scorecards, target setting, and reporting mechanisms.The EMMA strategy is a dynamic blend of equities and debt, maintaining a roughly 50:50 split. Additionally, it incorporates "tilts" to the portfolio, representing smaller exposures to specific themes.
The culmination of this collaborative effort was the establishment of the following targets:
Our Collaboratively Agreed Targets:
- Investing with Emission Reduction Goals: We are committed to investing with the aim of achieving emissions reductions within the portfolio, in alignment with the global objective of net-zero emissions by 2050. Furthermore, we are dedicated to adhering to a science-based pathway that is equitable for emerging markets.
- Science-Based Commitments for Equity Holdings: Our commitment extends to having 75% of equity holdings (by emissions) equipped with science-based commitments by 2030. This deliberate approach ensures we actively contribute to the reduction of emissions within our portfolio.
- Engagement with High Emitters: We recognize the importance of engagement in achieving our emission reduction goals. Therefore, we have set a target to engage with the highest emitters within our emerging market equity holdings, accounting for 65% of total emissions. By doing so, we aim to drive positive change where it is needed most.
- Alignment with Net Zero Sovereign Index: At least 80% of sovereign bonds within our portfolio will be classified as either "very high alignment" or "high alignment" categories of the Net Zero Sovereign Index by 2030. This proactive approach ensures that we are investing in sovereigns that are actively pursuing a low-carbon future, with no exposure to sovereigns in the lowest two Net Zero Index categories.
- Embracing Sustainable Investments: In a bid to promote sustainability further, we are working towards achieving a minimum 10% exposure to sustainable investments by the end of 2023, with plans to increase this allocation to 15% and beyond in the future. This strategic shift is a testament to our commitment to responsible investing.
Our journey towards achieving net-zero emissions by 2050 is not just a target but a reflection of our commitment to sustainability and responsible investment. We firmly believe that through collaboration, diligent goal-setting, and a commitment to transparency, we can create a portfolio that not only aligns with our values but also contributes to a more sustainable and equitable future.
The collaborative approach with Ninety One exemplifies how partnerships built on shared values, knowledge, and a drive for positive change can lead to pragmatic yet ambitious outcomes. Together, we are not just investing in the future; we are actively shaping it for the better.
l-r Grant Webster (91), Annika Brouwer (91), Jennifer Devine (WPF) and Daniel Smith (WPF) at a meeting to discuss the portfolio's goals and strategy