Further information about Responsible Investing at Coutts

Carbon emissions represents the total amount of carbon emissions emitted into the atmosphere either directly or indirectly by an individual, organization, product, or activity, measured in units of carbon dioxide equivalent (CO2e). It is typically measured in metric tons of carbon dioxide equivalent (MtCO2e) encompassing both direct emissions (Scope 1) from sources like fuel combustion, indirect emissions (Scope 2) from sources such as purchased electricity and heat and emissions from everything else within the company value chain (Scope 3). 

Climate change is the long-term shift in the Earth's average temperatures which impacts weather conditions. This could be an increase or decrease in average surface temperature. Global warming refers to the increase in the average surface temperature of the earth, caused by greenhouse gas emissions from human activities. Climate change and global warming are often used interchangeably. 

Scenarios are hypothetical illustrations of what a future world could look like from a climate change perspective. We use forward-looking data metrics, such as Climate Value-at-Risk (CVaR) and Implied Temperature Rise (ITR) to evaluate the impact of these scenarios on your investments value. 

The custom-built funds are managed via our strategic relationships where we (Coutts) define the investment parameters and ESG policies. This means we design the funds and set the Responsible Investing Policy.  

The impact a company has on the environment. This includes things like carbon emissions, deforestation, water usage or waste production.

EOS at Federated Hermes (EOS) are a stewardship service provider, which engage with companies on behalf of investors to encourage responsible investing behaviour. 

The Financial Conduct Authority (FCA) is the regulatory body in the United Kingdom responsible for overseeing financial services firms and markets to ensure their integrity, transparency, and fair treatment of consumers.

The company's governance practices which determine how the business is run. This includes its accounting practices, how it negotiates with suppliers, its attitude to diversity and how it contributes to a fair and stable market environment. 

An economy that produces goods and services with very low carbon emissions or greenhouse gases.

MSCI Inc (MSCI) is a leading provider of indexes, analytics and data that are used by investors worldwide to assess and manage investment portfolios, with a focus on ESG (Environmental, Social, and Governance) factors.

The Net Zero Asset Managers Initiative is an international group of Asset Managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.

Risks related to the physical impacts of climate change. They are split into acute and chronic risks. Acute risks are event driven risks such as weather events that are becoming more common and severe due to climate change. Examples include heatwaves, floods, droughts and storms. Chronic risks are long-term changes in climate patterns that have a significant impact on the planet. Examples include sea level rise, ocean acidification and rising temperatures.

Principles for Responsible Investment is a United Nations-supported international network of financial institutions working together to implement its six aspirational ESG principles. The PRI encourages investors to use responsible investment to enhance returns and better manage risks.

Means the environmental, social and governance (ESG) policies we use to set out how we implement our Responsible Investing and Net Zero Framework.

In 1987, the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Sustainable development requires an integrated approach that considers environmental and social concerns alongside economic development. From an investment perspective, this means considering environmental, social and governance (ESG) factors in investment decision making. 

The Paris Climate Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. The goal is to limit global average temperature to well below 2°C above pre-industrial levels, aiming for 1.5°C.

Funds managed by external asset managers. We do not define the investment parameters or Responsible Investing policies of third-party funds however, we consider their responsible investing practices and  climate strategies as part of our Responsible Investing Framework in our fund due diligence process.