IFM Investors 2020 Climate Change Report

In October 2020, we committed to reducing greenhouse gas emissions across all asset classes, targeting net zero by 2050. This commitment is our flag in the ground, but we are not starting from scratch. Work is already underway to help us meet our goal.

Our inaugural Climate Change Report covers our approach and the work we have undertaken to understand and manage climate change risks across our investment portfolios since 2016, when we first articulated our position on climate change. The report aims to provide transparency to our investors, our people and other important stakeholders.

Our current strategy focuses on understanding climate-related risks and opportunities and working closely with our listed and unlisted investments to support them to prepare for the transition to a net zero economy. We believe that it is important for long-term investors like us, who take climate change seriously, to support our investments’ transition, as opposed to divesting them due to high emissions intensity or current risk exposure.

This approach has seen us:

• Embed climate risk considerations in all pre-acquisition investment decision making processes;

• Measure and report the carbon footprint of our infrastructure investments and work with them to reduce emissions over time; and

• Engage with listed companies to improve climate risk management plans, goals and disclosure.

The report also outlines the work that is currently underway to develop an organisation-wide climate change strategy that extends across all asset classes. The strategy will outline the actions IFM will undertake in order to set a path and meet our net zero 2050 target, including:

• Establishing top-down goals and commitments – eventually covering all asset classes;

• Developing supporting internal policies, guidance, decision making frameworks and credible net zero transition plans for new and existing assets;

• Developing the capabilities we need to build new products and investment solutions that contribute to a decarbonising economy; and

• Establishing measurable asset, portfolio and/or firm wide targets to hold ourselves to account.

This report has been compiled in the format recommended by the Financial Stability Board’s Task force on Climate-related Financial Disclosures (TCFD), around four key areas of disclosure: Governance, Strategy, Risk Management, and Metrics and Targets.

We support the TCFD recommendations because we see them as a critical framework for financial market participants to assess and communicate climate change-related risks and opportunities – which we believe is necessary to support the resilience and stability of financial markets over the long term.

As long-term investors, we believe that it is in the financial interests of our investors, and their members and beneficiaries, for us to have a plan to address the risks of climate change. We also see it as absolutely necessary if we are to continue delivering on our purpose, which is to protect and grow the long-term retirement savings of working people.