Becoming a more sustainable bank
As our Q4 2019 responsible investing report shows, we’re setting ambitious targets and for very good reason.
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The news on climate change is stark – we all need to do more to reduce our impact on the environment. Many of us have already made changes to the way we live to do our part.
But have you considered the sustainability of your bank?
Big, bold and brave targets
At Coutts, we’re very aware of our responsibility to ensure that the way we do business has as little negative impact as possible.
For our asset management division, there are already big targets in place to help ensure our clients’ investments play a role in creating a better world.
Leslie Gent, Head of Responsible Investing, explains: “Carbon dioxide is the main source of greenhouse gas emissions. So, we’ve set two targets to reduce the carbon intensity of our funds and discretionary portfolios: a 25% reduction in our equity holdings by the end of 2021, and a 50% reduction in our overall holdings by 2030.
“The short-term target shows our commitment to supporting a lower-carbon economy and recognises the urgency of addressing climate change. The longer-term target is aligned with climate science.”
Carbon intensity measures the amount of carbon a company emits per million dollars of revenue. This common unit of measurement helps us assess the carbon emissions of different companies in different sectors. It allows us to understand how exposed our funds and portfolios are to carbon-intensive companies.
Leslie continues, “We’ve already reduced the carbon intensity of the funds that support Coutts Invest – our online investment platform - by 20% to 30%, a big step towards our 2021 target. As we extend this approach to our other funds and portfolios, all our clients will benefit from reduced exposure to carbon risk and a lower carbon footprint.”
You can find out more about how we’re reducing the carbon intensity of our portfolios via our Responsible Investing pages.
Supporting clients who are interested in increasing the energy efficiency of their homes, will also be a key part of our sustainability plans.
If you’ve ever bought a UK property, you’ll be familiar with the Energy Performance Certificate (EPC). This measures the energy efficiency of a property on a scale of A to G, and since 2007 every property sold must have one.
Alison Robb, our Sustainability Director, explains, “We’re looking at ways to support borrowers in improving the energy efficiency of their properties. We’ve started by reviewing the EPC ratings of the properties on our mortgage book to understand the scope of the task.”
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Steps we can take to reduce the impact of our banking activities are similar to those being taken by other consumer sectors. For example, we’re looking at ways to reduce the packaging for our credit and debit cards. This is a small but significant step to lower our energy consumption and landfill. We’re also looking at how we can enable our clients to recycle their cards.
Alison highlights one measure we’re taking that’s unique to Coutts. “We’re engaging with the suppliers on our Thank You From Coutts rewards programme to discuss their sustainability ambitions,” she says. “For example, our fashion supplier Net-A-Porter is offering a sustainable fashion line for clients who want to ensure that looking good doesn’t cost the Earth.”
Our responsible investing activity in Q4 2019
Responsible investing has been embedded in our investment process for nearly five years now. We work with EOS at Federated Hermes to use the voting rights that come with share ownership, and engage with the companies we invest in for our clients.
Over the last quarter of 2019, EOS engaged with 69 companies on our clients’ behalf, and voted at 27 shareholder meetings. The charts below summarise the subjects that they discussed and voted on with company management.
When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.
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