WTW aim net zero by 2050
Willis Towers Watson Investments will aim to target net zero emissions by 2050 at the latest, with at least 50% reduction by 2030, in its fully discretionary delegated investment portfolios.
Craig Baker, Willis Towers Watson global chief investment officer, said climate change and a just transition to net zero greenhouse gas emissions was a systemic and urgent global challenge.
“We believe that working to achieve net zero by 2050 in our discretionary portfolios is completely consistent with the financial goals we have been given by our clients as climate change has the potential to impact returns across multiple asset classes,” Baker said.
“We have already embedded this in our investment process and ultimately in the portfolios we are managing and stewarding.
“Being strategically ahead of a low-carbon transition will, in our opinion, significantly improve risk-adjusted returns for our clients as the mispricing of climate issues is resolved.”
In particular, Baker said, the firm thought understanding this transition would be one of the biggest sources of alpha across all asset classes and that this opportunity was likely to be greatest in the next few years.
“We will therefore target pathways to net zero that seek out pricing opportunities while delivering a reduction in emissions of more than 50% between 2015 and 2030, consistent with the Paris Agreement,” Baker said.
The firm was also investing heavily in analytics in this space and they believed there was not one single definitive metric that could be used measure progress.
This included the firm’s proprietary Carbon Journey Plan methodology, the ‘impact measurement framework’ they had developed together with other industry participants via the Thinking Ahead Institute, their acquisition of Acclimatise in December 2020, and the arrival of the energy finance team from the Climate Policy Initiative in January 2021.
“We will also continue to work with our advisory clients to set out and deliver on their own climate-related goals via Carbon Journey Plans, including analytics on how climate change might impact liabilities as well as assets,” Baker said.
AUTHOR
Chris Dastoor
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