SJP TCFD Product Report
The TCFD Product Report is a regulatory document produced annually, highlighting a number of carbon metrics for each of our funds.
What is it?
A report where we disclose climate metrics for each of our funds. It includes information such as the Carbon Footprint and Weighted Average Carbon Intensity of each fund, as well as information on how we think climate-related risks might affect a fund’s performance.
We update it every year with data from the past 12 months to build up a picture of how the climate profile of funds is changing over time.
Why is it useful?
It helps clients understand how their funds are positioned with regards to climate change and the energy transition. Climate risk may impact the investment performance over the long-term and clients should have access to information to understand how this may happen.
We use the data to identify and monitor climate risks within our investments.
If you have any questions about the report please contact your SJP Partner. You can find more information about our responsible investment approach here.
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.
2024 report summary
Over 2024, we’ve continued to progress towards our net zero goal.
In this year’s report, we show carbon metrics for forty of our funds. Of these, only four had a higher Weighted Average Carbon Intensity than their comparator benchmark and only one was considered ‘carbon intensive.’ This means it had higher carbon intensity than its comparator in two or more of the following sectors: energy, materials and/or utilities. These sectors have significantly higher emissions than others.
We also started calculating how aligned our funds are to the Paris Agreement of keeping global temperature rise below 2°C, ideally limiting the rise to 1.5°C, measured by ‘Implied Temperature Rise’. Only five of our funds are aligned to this goal.
While Implied Temperature Rise is an estimate, this result is common across the industry. Currently, the world isn’t on track to achieve net zero by 2050 and therefore neither are most investment funds. As companies set new targets to reduce their carbon emissions, we’d expect this to change over time.
What are we doing?
Stewardship and engagement will be a key lever for us to achieve our goal.
More action from governments and policymakers is vital to achieve net zero. We believe that without this investors alone can’t make the Paris Agreement a reality.
We already monitor our fund managers’ approach to climate change and how they engage with companies, encouraging them to prepare for the climate transition. More recently, we’ve started monitoring their macro stewardship. How are they trying to influence wider industry, governments and policymakers to push for more movement around climate policy?
Over 2025, we’ll begin working more closely with our fund managers and engaging with companies directly ourselves, with the climate transition being the priority focus of these discussions.
We’ve set our next interim target of reducing carbon emissions across our investments by 50% by 2030 (compared to 2019). We’ll continue to report our progress every year to keep ourselves accountable.
We’ve set a target to achieve net zero emissions for our investments by 2050. We calculate these metrics annually, which helps us track how each fund is progressing towards this goal. Generally, we want to see Weighted Average Carbon Intensity metrics for all funds reduce over time.
This year we included a new metric, Implied Temperature Rise, for our funds. It’s a forward-looking metric which indicates the extent to which a fund is aligned with the goals of the Paris Agreement. Most of our funds are “misaligned” or “strongly misaligned.” While the metric is an estimate, this result is common across the industry because, as things stand, the world isn’t on track to achieve the goals of the Paris Agreement. We’re expanding our engagement work which aims to ensure that our investee companies are well positioned with regards to the energy transition. We expect Implied Temperature Rise to be revised down over time as our companies decarbonise. However, more action from governments and policymakers is vital to achieve net zero.
Section 3 of the report (see page 15) includes information for each fund. We don’t calculate metrics for the following funds and have explained why on page 97.
• Diversified Assets (FAIF)
• Global Government Bond
• Global Government Inflation Linked Bond
• Global Absolute Return
• Money Market
Different metrics show us different things. They complement each other and provide a bigger picture.
Backward-looking metrics:
• Absolute Financed Emissions
• Carbon Footprint
• Weighted Average Carbon Intensity
These metrics look at what carbon emissions have been in the past. This is useful to help us identify trends i.e. whether emissions are going up or down. Although a decrease in one year doesn’t necessarily mean emissions will go down every year.
Forward-looking metrics:
This year we started calculating two new metrics, both of which are forward looking:
• Implied Temperature Rise
• Climate Value at Risk
Forward-looking metrics try to show what could happen in future based on what we know today. For example, based on companies in the fund today, how aligned is the fund to the Paris Agreement?
Both types of metric are useful to help us get a sense of whether our fund managers and the companies they invest in are moving in the right direction towards decarbonisation and net zero.
Section 4 of the report is a glossary with detailed information on how each metric is calculated and what can cause it to change.
Our Approach to Responsible Investment Guide is a good place to start. The responsible investment webpage also outlines our approach and includes more detailed reports.
Previous reports
Please note that these are no longer in date. Please refer to the most recent version of the report for the most up to date information.
