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16 Feb 2022

NET ZERO AND NEW TARGETS: COUTTS INVEST TAKES BIG STEPS ON SUSTAINABILITY

New changes mean at least half the underlying investments of our digital service work towards net zero carbon emissions, and there are tough restrictions on tobacco and weapons companies.

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People who use our online platform Coutts Invest can rest assured their holdings are working harder than ever to protect the planet after we made the funds even more sustainable.

We’ve made a number of changes to the five Personal Portfolio Funds that sit behind Coutts Invest, which include:

1.

Ensuring at least half the underlying investments work towards net zero – not adding to the amount of greenhouse gases in the atmosphere – by 2050.
 

2.

New ethical restrictions to minimise or eliminate exposure to sectors that fail to meet our high responsible investing standards, such as tobacco, gambling and weapons.
 

3.

Adding more environmental, social and governance factors into the benchmarks against which we measure fund performance, making responsible investing a key part of how they’re evaluated.

It’s the latest move in our drive to tackle the biggest issues facing the future of our planet and society. This also includes tough targets to reduce carbon emissions from all our investments for clients, and using shareholder power to push for positive change at the companies we invest in.

Mohammad Syed, Head of Asset Management at Coutts, said: “Sustainability is rapidly becoming the new investment standard, and at Coutts we’ve been on this journey since 2016.”

Referring to international climate change treaty the Paris Agreement, which aims to limit global warming, he added: “By making net zero an explicit part of our investments, we’re making an ambitious commitment to our clients and taking the next step on our journey to a sustainable, Paris-aligned world.”

SUSTAINABILITY WITHOUT SACRIFICING PERFORMANCE

Leslie Gent, Head of Responsible Investing at Coutts, said that, while the global commitment is to achieve net zero on carbon emissions by 2050, “the decade of action is now”.

“Our power lies in taking immediate action that has a real impact today, rather than years from now,” she said. “Helping our clients invest responsibly has a more positive impact on the climate, even more so than going vegan or giving up flying, so this is a logical way for us to help them make a difference.”

She added: “While some are still under the impression that investing responsibly means giving up financial performance, we believe our clients can do well by doing good.

“Considering the impact of climate change on business strategy and operations puts companies in a strong position to benefit when our world transforms to net zero.”

BALANCING PURPOSE AND PROFIT

In July 2021, Coutts passed a rigorous, independent assessment to become a certified B Corporation (B Corp) – the largest private bank and wealth manager in the UK to achieve the status. B Corps are businesses that balance both purpose and profit, aiming to build a more inclusive and sustainable economy.

When the certification was announced, Coutts CEO Peter Flavel said: “When we saw that one of the ambitions of the B Corp community is to accelerate a global culture shift to redefine success in business and build a more inclusive and sustainable economy, we knew we had to be a part of it.”

 

WHAT DOES IT MEAN TO BE ON THE ROAD TO NET ZERO?

We can’t achieve net zero emissions by tomorrow – the world’s airplanes, supermarkets and houses just aren’t ready.

But we do know we need to reduce emissions as quickly as possible to maximise our chances of limiting global warming to 1.5C, the target set out in the international Paris Agreement.

We’ve therefore designed the underlying funds of Coutts Invest to decarbonise by 30% straight away, and we then plan to reduce those emissions by 7% every year, which would mean hitting net zero by 2050.

Our minimum commitment today is 50%, but as more data and investment opportunities become available we are looking to increase this number.

 

Find out more about Coutts Invest and the Personal Portfolio Funds.

Read more about Responsible Investing at Coutts.

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