Redington, which advises on over £500bn of assets, has today announced that going forward all default client advice will be aligned with the goal to reach net zero carbon emissions by 2050 at the latest, as outlined in the Paris Agreement.
Redington has estimated that as a result of this change most clients will achieve a 50% reduction in carbon emissions by 2030.
The commitment represents a meaningful evolution to the way that Redington will work to deliver investment advice and set strategic asset allocations for clients, and sits alongside a broader 7-point climate action plan to integrate sustainability across its entire business, including commitments to reduce and offset its own emissions.
The 7-point climate action plan is as follows:
- Objective Setting: helping our clients articulate their own climate-related objectives and integrating three key metrics (carbon emissions, climate risk management, and impact) into our investment framework to help them achieve their goals while contributing to real-world economy decarbonisation.
- Climate Solutions: continuing to seek out attractive investment opportunities in climate solutions and helping our clients achieve their impact objectives, contributing to the real-world transition to a net-zero emissions economy. Over the past two years, we have helped our clients commit £1.8bn to the development and construction of renewable energy infrastructure. We estimate this will result in a c.940k tonne reduction in carbon emissions per annum, which equates to removing c.186k cars off the roads each year.
- Industry Frameworks: helping our clients adopt, and actively engage with, appropriate industry-recognised frameworks – such as those developed by the Paris Aligned Investor Initiative, of which we are members – in order to facilitate the transition to net zero.
- Stewardship: developing a framework to assess the effectiveness of the climate-related stewardship carried out by asset managers, including voting on climate transition plans, and undertaking purposeful engagement with managers ourselves to encourage alignment with the Paris Agreement throughout the wider investment value chain.
- Default Client Advice: aligning our model portfolios with the goals of the Paris Agreement – to limit global warming to 1.5 degrees and achieve net zero by 2050 – thus changing the way we advise our clients to set strategic asset allocations. As a result, we envisage most clients will achieve a 50% reduction in carbon emissions by 2030.
- Carbon Offsetting: using high quality nature-based offsets to become a net-zero business by the end of 2021.
- Industry Collaboration: sharing lessons learned and working with our peers to create a Paris-aligned industry, maintaining our culture of being open and transparent.
Mitesh Sheth, CEO of Redington, commented: “There is an ever-increasing focus on what we, as an industry, can do to create a sustainable future for all. As an adviser to over £500bn of client assets, allocated across 150+ asset managers, we recognise that we have a responsibility to use our influence as a force for good, creating positive change within the savings and investment industry.
“Addressing the threat of climate change is no mean feat – and whilst we are working to reduce and offset our own emissions, we know that having a meaningful impact will require a lot more than this. Offering standalone sustainability services is also not enough, which is why we have taken this next step and committed to integrating sustainability across our entire business.
“Effective immediately, our default position will be to deliver investment advice that is aligned with achieving the goals of the Paris Agreement, reaching net zero by 2050 at the latest.
“This represents the biggest transition that we as a business have gone through since our founding, but something that we believe is vital in order to truly make an impact through our influential role in the broader value chain.
“That said, the global transition to net zero is a monumental task. It will require our continual innovation, experimentation, and the sharing of different perspectives. We can only achieve this through collaboration with our clients, asset managers, industry peers, and policy makers. Together, we can make a meaningful difference.”