1.5 Degree Transition Challenge - Liontrust Engagement Update 11.21 - Flipbook - Page 4
What, specifically, are we asking companies to do?
• Be more ambitious in emission reduction targets to make their
pace of decarbonisation consistent with what science is telling
us, requiring a halving this decade.
• Show front-loaded timely targets for this: for example, a 50%
reduction in direct emissions by 2030 based on a suitable
baseline and a 25% decrease by 2025.
• Understand the largest sources of indirect (Scope 3) emissions for
their business and investigate what opportunities exist to reduce
these aggressively.
So far, we have contacted
71
companies
and met with
We initially planned to engage with all the companies held across
the Sustainable Future funds but have not achieved this so far. This
is largely due to Covid-19, as we suspended all engagement
initiatives for two quarters in 2020 to concentrate on the impacts
of the pandemic on the businesses held in our funds and their staff.
While this is
57
of these for detailed discussions
about decarbonisation targets
We found just
33
• Something we are not asking is for companies to automatically divest
from the more carbon-intensive parts of their business, especially if
this is enabling people to reduce emissions by using their products.
Instead, we want them to innovate and come up with creative ways
to operate in step with an ultra-low carbon economy.
40%
by number (with 190
holdings across the funds),
we have prioritised those
responsible for the highest
levels of direct emissions
in our portfolios.
contributed
CO2
companies
(17% by number)
Of these,
90%
with
63%
are involved in the ScienceBased Target Initiative (SBTi)
24%
and a further
committed to
1.5 degrees
by 2030
which is proving a helpful resource in
setting decarbonisation strategies
For a significant proportion of companies, we appear to be pushing
on an open door but have to acknowledge our engagement has
focused on a proactive sub-set of the economy where businesses
are typically better than the market average on carbon abatement.
In contrast, there remain a small number of hard-to-abate industries –
4 - Liontrust: 1.5 degree Transition Challenge – engagement update
of emissions
from the Funds
9%
to 2 degrees. This
means a third overall
are Paris aligned to less
than 2 degrees and
have some manner of
target in place to reduce
absolute emissions.
primarily heavy industries such as the steel, cement, and aluminium
sectors that employ extremely high-temperature processes – which
have not yet been able to come up with absolute reduction targets
in line with the science.
