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2020 Climate Report

Prepared in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures, this report details our ongoing efforts to integrate climate-related considerations into our investment platform, organizational structure, and business operations.

The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only. 

Contents

  • Message from leadership

  • Introduction

  • Oversight and management of climate matters

  • Strategy and risk management

  • Addressing our operational footprint

  • Next steps and closing statement

Message from leadership

We believe climate change will profoundly affect society, economies, and capital markets. Market participants must develop a greater understanding of climate-related risks and opportunities and start to shift capital toward innovative solutions. The investment community has a vital role to play in strengthening society’s response to climate change, and we intend to lead by example.

Wellington endorsed the Task Force on Climate-related Financial Disclosures (TCFD) framework in 2017 as it aligned with our view of climate change as a systemic risk to long-term financial performance. In September of 2018, we began studying the physical risks of climate change through a research collaboration with Woodwell Climate Research Center (Woodwell), a top-rated climate research organization. We aim to bridge the gap between climate science and finance, deepening our appreciation of how climate variables including increased heat, drought, wildfires, floods, hurricanes, access to water, and sea-level rise will impact the securities we invest in on behalf of our clients.

This research led us to pursue additional collaborations and commitments. In 2019, in conjunction with the California Public Employees’ Retirement System (CalPERS), we developed a Physical Risks of Climate Change (P-ROCC) framework to enhance engagements and help the companies we invest in improve climate disclosure. Our Director of Climate Research joined the Commodity Futures Trading Commission’s (CFTC’s) Climate-Related Market Risk Subcommittee to examine climate-related financial risks and lay the groundwork for further action. In 2020, we became a founding member of the Net Zero Asset Managers initiative, targeting net-zero emissions within the investment portfolios we manage for our clients by 2050 or sooner.

This work has strengthened our conviction that climate science can inform our stewardship approach and enhance the investment decisions we make on behalf of our clients. Looking ahead, we are working to deepen our climate research in the areas of adaptation, mitigation, and innovation. We also aim to broaden our engagement efforts to encourage companies to set science-based decarbonization targets that may help avoid the worst effects of physical climate change, and partner with clients to achieve net-zero portfolio emissions.

A lot of work lies ahead as we chart a course toward a low-carbon future. We see these efforts as critical to our firm’s mission of driving excellence for our clients to positively impact millions of beneficiaries’ lives.

Jean Hynee signature

Jean Hynes, CFA
Incoming Chief Executive Officer

Wendy Cromwell's signature

Wendy Cromwell, CFA
Vice Chair and Director, Sustainable Investment

Our approach to sustainable investing

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Chris Goolgasian
 CFA, CPA, CAIA
Erika Murphy
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