1.5 Degree Transition Challenge - Liontrust Engagement Update 11.21 - Flipbook - Page 2
Executive summary
In early 2020, Liontrust’s Sustainable Investment team committed to
our One and a Half Degree Transition Challenge. This has involved
engaging with companies held across the Sustainable Future funds
and challenging them to raise their ambitions to reduce absolute
carbon emissions – and the following pages reveal our findings
so far.
To keep the global average temperature rise below 1.5 degrees,
the science is telling us that unprecedented decarbonisation is
needed, halving emissions by 2030 and continuing at this pace to
2040 and 2050. This is a huge challenge and will require major
changes across the economy.
From an investment perspective, the challenge of rapidly reducing
emissions will drive innovation, which will accelerate the uptake of
2 - Liontrust: 1.5 degree Transition Challenge – engagement update
ultra-low products and services. There is a competitive advantage to
be gained by proactively managed businesses that will be rewarded
economically in an increasingly carbon-constrained world.
To summarise our findings, around a quarter of the companies with
which we engaged have absolute decarbonisation targets in place
consistent with 1.5 degrees (others aligned with the Paris Agreement
take this to a third), which obviously means, at present, two thirds
do not. The situation is moving rapidly, however, and very few
companies do not see this as a major focus for the years ahead.
Our engagement also revealed important issues across areas such
as emissions disclosure, business risks and offsetting, and we will
continue to engage with our companies on decarbonisation and
monitor progress on these vital goals.
