Our environmental impact
At Rathbones, we recognise our responsibility to contribute to the transition and we are focused on measuring and reducing our operational footprint as well as that of our investment portfolios. It is our responsibly to understand how every cog in the Rathbones wheel is affecting the planet. For our clients, we have a responsibility to understand how climate change may impact our portfolios and what we can do to minimise the risks, be they physical or transitional. We believe that to deliver our best for our stakeholders we must, think, act and invest responsibly. One aspect of this is our 2021 commitment to achieve net zero emissions across the group by 2050 or sooner.
As a business we continued to support CDP (formerly the Carbon Disclosure Project), both as an investor and as a responding business. Our score of C reflected our lack of targets at the time. We were pleased to announce these in October 2021 and expect our 2022 score to reflect the progress we have made on both the measurement of our scope 3 emissions and our net zero alignment targets.
Given the scale of the problem, and the necessity for solutions to be global in scope, we believe in the power of collaborative engagements and are members of the IIGCC and the CA100+ coalition.
We support the work of the Task Force on Climate-related Financial Disclosures (TCFD) and in 2021 produced a standalone document to support communication of our alignment to the elven recommendations. A summary is included in our 2021 annual report and more detail in our standalone TCFD report. Allied to the work being undertaken by our business to integrate environmental, social and governance data into our investment decisions and engagement process we have created a cross-functional team to oversee our approach. The responsible business committee has oversight of both our responsible investment programme and our environmental programme and supports their interaction as well as approving our TCFD, PRI and CDP disclosures.
For more information read our responsible business report and our group climate statement.
- operationalisation of our net zero emissions plan, including the engagement of our suppliers
- integration of Saunderson House into our data processes
- expansion of our reporting on the financial implications of climate change to include a broaderclient population
Rathbones Group Commitment
In July 2021, the group announced its intention to be a net zero emissions business by 2050 or sooner. This ambition aligns with the need to limit warming to no higher than 1.5oC above pre-industrial levels. Using 2020 as our baseline year, and having undertaken a full emissions inventory, we used the Science-Based Targets initiative (SBTi) methodology to set our operational and investment targets. Operationally, we will work to achieve a 42% reduction in operational and supply chain emissions by 2030. With regard to our investments, we want to see at least 57% of our underlying holdings having committed to, or set, their own SBTi aligned target by 2030. This is in line with Group’s objective of achieving 100% investment coverage by 2040.
Delivering on this will see us build on the 81% reduction in operational carbon intensity per full-time employee since 2013 and complete the transition of our offices to renewable energy sources by the end of 2025. Together, these will help us meet our internal target of a 21% reduction across our Scope 1 and 2 and operational Scope 3 emissions by 2025.
In addition to these group targets, Rathbone Greenbank Investments (Greenbank), Rathbones’ specialist ethical, sustainable and impact investment arm, announced its plan to reach net zero emissions by 2040 (including operations, supply chain and investments). Greenbank followed the Net Zero Investment Framework (NZIF) to set targets covering the investments it manages. Steps have already been taken to make quantifiable achievements in each of the three scopes that the Greenhouse Gas Protocol has identified.
Progress towards all these targets will be tracked through Group’s annual public reporting. Both group and Greenbank will disclose their net zero strategy to the Net Zero Asset Managers Initiative, which they joined in 2021.
Rathbone Greenbank’s commitment
In addition to the Group commitment, Rathbone Greenbank Investments (Greenbank), Rathbones’ specialist ethical, sustainable and impact arm, has detailed its plan to become a net zero emissions business by 2040. This commitment covers emissions associated with its operations, supply chain and investments.
Greenbank’s net zero emissions plan includes:
- a cut of 60% in the carbon intensity of its investments by 2030, with 2020 as a baseline year
- a continuation of its long-standing strategic engagement programme to encourage corporate action on climate change and drive alignment to net zero emissions
- a commitment to reach net zero carbon emissions from its own operations and supply chain by 2030, in line with Group, using the Science-Based Targets Initiative (SBTi) framework, an internationally recognised methodology.
Greenbank has followed the Net Zero Investment Framework (NZIF) to set targets covering the investments it manages. Since November 2019, Greenbank has worked alongside over 70 other investors, representing $32 trillion in assets under management, as part of the Paris Aligned Investment Initiative to develop the NZIF. The NZIF is a strategic framework which asset owners and managers can use to maximise their contribution towards net zero emissions. Greenbank also discloses this net zero strategy today to the Net Zero Asset Managers Initiative, which it has been a signatory to since March 2021.
As part of our commitment to transparency, we will share updates on our progress through our annual reporting. To find more information on our current approach and initiatives, please visit our Responsible business report, our TCFD statement our Group Climate Change Statement.
1: Scope 1,2 and 3 as defined by the WRI GHG protocol
The impact of our investments
As a wealth manager, we recognise that climate risks can materially affect the performance and valuation of our clients’ investments. We therefore have a duty, as stewards and allocators of capital, to understand how climate change can impact the investment we make on behalf of our clients and to allocate assets to minimise climate risks, be they physical or transitional. Companies that set ambitious targets and credible implementation plans in line with achieving net zero emissions will become increasingly attractive investment propositions. Those that fail to do so will find themselves at a competitive disadvantage, exposed to regulatory risks and prone to finding their assets stranded.
Full-year (FY) 2021 emissions decreased by 8% compared to FY20, based on boundaries set by the Streamlined Energy and Carbon Reporting (SECR) requirements. This was largely driven by a drop in energy emissions. While overall emissions remained lower than pre-COVID 19 levels, Scope 1 emissions are at their highest in five years, which is primarily attributed to the increase in natural gas consumption caused by the reopening of the Liverpool office. Scope 3 emissions decreased, building on last year’s trend, mainly due to a reduction in business travel. Despite UK COVID-19 restrictions easing in early 2021, flying was still very much limited and dependent on international government regulations. Similarly, Scope 2 emissions were reduced due to electricity consumption reduction from COVID-19 restrictions and employees working from home. To support us keeping our levels of travel low, in March 2021, we introduced a new employee benefit of an e-vehicle scheme.
We are committed to reducing our operational footprint on an annual basis. To compensate for our residual emissions (GHG emissions left after all technically and economically feasible solutions have been implemented), we continue to offset part of our emissions in partnership with ClimateCare to identify high impact projects which reduce carbon emissions and enable community development. Each of these exciting projects was selected in line with our support of the UN’s Sustainable Development Goals and is certified by internationally accredited bodies. Going forward, as part of our longer-term planning around delivery on our net zero targets, we will assess the role of offsetting, including the source of our credits, to ensure we hold ourselves to the same level of accountability as we do our investee companies.
As we operationalise our net zero commitments, we are considering our long-term approach to carbon removal. We have already shifted our annual offsetting to nature-based solutions and will work with partners to put projects in place that will allow us to expand our removal capability, initially covering our operational footprint and then expanding to cover our supply chain from 2030.