In order to limit global warming to 1.5°C in alignment with the Paris Agreement, a 50% global reduction in emissions by 2030 is required, and net zero must be achieved by 2050.1 Ecofin supports a rapid transition to a low-carbon economy and is a proud signatory of the Net Zero Asset Managers initiative. Ecofin has elected to utilise the Science Based Targets initiative (SBTi) Portfolio Coverage Approach for financial institutions to quantify this initiative, whereby Ecofin will set engagement targets to have a portion of its investees set their own SBTi-approved science-based targets (SBTs) such that Ecofin is on a linear path to 100% portfolio coverage by 2040. For context, with respect to financial institutions, SBTi has a Portfolio Coverage target of 100% SBT portfolio coverage by 2040.
, a pace that should put it on track towards 100% SBT portfolio coverage well before SBTi’s financial institution coverage deadline of 2040.
Keep reading below for further detail on Ecofin’s net zero journey with SBTi and net zero disclosure.
Proportion of AUM to be managed in line with net zero: All publicly traded equities at Ecofin (Energy Transition, Global Renewables Infrastructure, Sustainable Listed Infrastructure, Global Water strategies ) as of December 31, 2022 totalled 71% of Ecofin’s overall AUM, or $2.1B.
If less than 100% AUM is initially committed, a brief explanation of why the proportion is the maximum currently achievable and how it will increase over time: The covered assets represent all of Ecofin’s publicly traded equity strategies and any future publicly traded equity strategies the firm may launch.
Ecofin’s private infrastructure and fixed income investments are not included in the covered assets. We will continue working with network partners to assess methodologies for measuring and setting targets for these assets and will include in our commitment as it is practical to do so.
Baseline Year: The baseline year is 2020. As of 12/31/20, 22% of Ecofin’s publicly traded companies had committed to, or have set a SBT.
Target Year: The target year is 2030.
Quantified target(s) to be achieved by target year: Targeting 75% of covered assets will have committed to or set SBTs for reducing GHG emissions, approved by SBTi by December 31, 2030.
Methodology used to set targets: SBTi for Financial Institutions – Portfolio Coverage methodology
Coverage of Scope 1, 2 and extent of Scope 3 coverage of financed emissions: SBTi for Financial Institutions – Portfolio Coverage methodology
Underlying science-based net zero scenarios/pathways from which targets are derived: SBTi for Financial Institutions – Portfolio Coverage methodology