Acting to tackle the climate emergency
The world’s scientific community has been clear for decades about the profound threat to human welfare that is posed by climate change[i]. The implications are systemic and already apparent[ii]. While a handful of businesses and governments have moved aggressively to reduce carbon dioxide and other greenhouse gas (GHG) emissions, the vast majority have not. As a consequence, the world faces the very real prospect of increases in global average temperatures of 3°C or even more above pre-industrial levels. These represent levels of climatic change that put us beyond the realm of human experience[iii]. This extent of global warming is expected to lead directly to catastrophic changes in precipitation patterns and intensity and sea-level rise and indirectly to changing conditions for agriculture, losses in biodiversity and changed patterns of disease among other notable impacts[iv].
At WHEB, we recognise this as a climate emergency. Such an emergency requires the world’s governments, businesses and civil society to respond by massively accelerating and scaling their efforts to mitigate GHG emissions in order to avoid further climate change. It also requires these groups to adapt to the inevitable change that is already locked into the global climate. WHEB commits to be a Net Zero Carbon business[v] by 2025 at the latest.
Direct operational emissions already eliminated
As part of a global movement across all parts of society, WHEB commits to accelerate our own efforts to eliminate GHG emissions across all aspects of our business. This includes further efforts to eliminate any residual carbon emissions associated with our direct operations. As an office-based financial services firm, WHEB has no Scope 1 emissions and since 2018 we have effectively eliminated our scope 2 emissions by sourcing the electricity used in our London-based offices from renewable sources.
Scope 3 emissions
As part of our efforts to accelerate action across other aspects of our business we have committed to setting an annual carbon budget to cover other sources of carbon emissions associated with our business operations. This includes the most relevant scope 3 emissions associated with purchased goods and services, business travel, employee commuting, and waste disposal[vi]. We will report annually on our progress in ensuring that these scope 3 emissions are kept within this budget.
For those emissions that we can not eliminate, we will, on an annual basis, purchase carbon offsets that at least cover these residual emissions. We will ensure that these offsets meet the highest standard and are independently certified[vii].
As an investment business, by far the largest impact that we can have is through the way we invest our clients’ money. WHEB is an investment management business that invests in companies that benefit from and enable the transition to a zero carbon and more sustainable economy. As such, tackling climate change is a central foundation on which WHEB’s business is based.
Five of the nine investment themes that make up WHEB’s core investment strategy are linked to climate change or associated environmental issues. These include Cleaner energy, Environmental services, Resource efficiency, Sustainable transport and Water management[viii]. Investments in these themes will, we believe, both enable and benefit from efforts to reduce carbon emissions in line with the targets set out in the Paris Agreement[ix].
Nonetheless, these companies also generate GHG emissions in the course of their own business. WHEB has committed to engaging with underlying companies held in our investment strategies to encourage them to accelerate their own efforts to achieve net zero carbon emissions by 2030. As part of our commitment to the Net Zero Carbon 10 Initiative (NZC 10) [x], we’ve committed to report on our progress against these efforts at least annually[xi].
Building a movement
WHEB was one of the first businesses to declare our support for the ‘Business Declares’ network[xii]. In setting out WHEB’s action plan, we aim to support the community of businesses taking urgent action to tackle climate change. Furthermore, we commit to advocate to other business leaders the importance and value of joining this movement at such a critical time.
[i] For example, the first report from the Intergovernmental Panel on Climate Change (IPCC) was published in 1990 and served as the basis for the UN Framework Convention on Climate Change (UNFCC).
[iii] Homo sapiens evolved 200,000 years ago. The warmest period since then was about 125,000 years ago. A period about 1.5°C-2.0°C warmer than pre-industrial levels https://www.ncdc.noaa.gov/global-warming/penultimate-interglacial-period/
[v] Net Zero Carbon applies to WHEB’s scope 1, 2, and most relevant scope 3 emissions.
[vi] These Scope 3 emissions cover all required categories relating to WHEB’s business as set out in the Greenhouse Gas Protocol (https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf)
[vii] For example, we plan to use PAS 2060 as a core standard for our carbon offsets.
[viii] For more information on WHEB’s investment themes and underlying holdings please visit https://www.whebgroup.com/investment-strategy/strategy/
[x] WHEB is one of the founding supporters of the Net Zero Carbon 10 (NZC10) initiative that commits WHEB to push for carbon neutrality by underlying investee businesses.
[xi] Emissions associated with managed investments and client services are considered as ‘optional’ reporting under the Greenhouse Gas Protocol (https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf)