Deep Dive #11: Net Zero Carbon: 2023
In a world grappling with the looming spectre of climate change Montanaro Asset Management (“MAM”) has chosen to chart a path that combines financial stewardship with environmental responsibility. We present our fourth annual update on the progress of “Project: Net Zero Carbon” as we continue on our multifaceted journey towards decarbonisation.
In this comprehensive update, we not only report on our portfolios’ decarbonisation progress but also share our Taskforce on Climate-related Financial Disclosures (TCFD)1 report and provide insights into our operational emissions reduction plan.
Our new commitment to become carbon negative and remove our historical emissions across our operations by 2030, a full two decades ahead of the Paris Agreement targets, underscores our dedication to ambitious climate action by going beyond net zero.
We have partnered with Klimate, a Danish Carbon Removal Platform, to select verified carbon removal projects and technologies to offset historical emissions. We emphasise carbon reduction through our investment process, engaging with investee companies, and participating in initiatives like the Glasgow Finance Alliance for Net Zero (GFANZ).
Over the past year, we’ve witnessed a significant increase in the number of companies committing to net zero and science based targets. We are dedicated to encouraging our investee companies to commit to the Science Based Targets initiative (SBTi) and have targets approved. As of December 2023, 93 companies on our Approved List2 had made SBTi commitments and set targets, representing 41% of AUM.
However, we are keen that these ambitious commitments should be acted upon. The MSCI Net Zero Tracker report reveals that nearly half of the listed companies included in their research have set a decarbonisation target3. Despite this increase in carbon reduction pledges, companies continue to emit greenhouse gases at levels close to pre-pandemic highs.
The global carbon budget for limiting temperature rise to 1.5°C is expected to be depleted by October 2026 if current emission rates continue.
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