Cardano publishes climate plan

Cardano, a pensions risk and investment management specialist, which advises on over GBP16 billion of fiduciary management assets and an additional GBP45 billion under advisory in the UK, has published its default position on the road to net zero which will apply to all its fiduciary management mandates and liability driven investments going forward.

Cardano supports the Paris Climate Agreement of limiting global warming to +1.5C and therefore commits its investment portfolios to net zero carbon emissions by 2050. The Group also supports global emissions reduction of 50 per cent by 2030, with baseline year 2019, which informs its asset-class decarbonisation targets.

In addition, Cardano commits to:

• Measure portfolios’ carbon footprint, its current greenhouse gas emissions, and its contribution to climate change by measuring financial risks, including transition risks, physical risks and environmental opportunities.

• Measure portfolio-financed emissions per pound invested, based on enterprise value including cash (EVIC). This is the primary measure that Cardano will use to set targets and decarbonise portfolios’ carbon footprint over time.

• Further invest in green bonds. Green bonds can support companies in less sustainable sectors achieve their transition, for example, a cement company that is looking to finance activities that decrease the carbon emissions of production.

• Invest in low carbon equity with a preference to engage and change behaviour, rather than divest. Cardano favours engagement that is long-term, collaborative, and prioritises real-world impact, such as reduction in absolute carbon emissions.

• Collaborate with industry to contribute to a more sustainable financial system. By coalescing around common themes and methodologies, collaboration allows for a faster, smoother transition. Cardano is a member and supporter of a number of sustainability-focused organisations, including the PRI, IIGCC, PCAF, the Net Zero Asset Managers Initiative and Climate Action 100+.

Kerrin Rosenberg, CEO, Cardano UK, says: “Sustainability has always been at the heart of our culture and how we run our business. We integrate sustainability – and climate change in particular – throughout the process of every investment we make.

“The climate crisis is the most fundamental challenge the global economy faces. Despite recent momentum, government action to tackle the climate crisis has so far been highly insufficient. We believe net zero is a collective action problem. First and foremost we will align our investment portfolios with net zero. But ultimately, we need to move the market as-a-whole. That’s why we’ll work collaboratively to protect our beneficiaries from the environmental and financial consequences of climate change.”