Castlefield's commitment to Net Zero

In December 2021, Castlefield announced its net zero policy, with commitments to achieving net zero in our own operations and supply chain, along with achieving net zero in our investment portfolio.

Here, Ita McMahon from the Castlefield Investment Team outlines our net zero commitments and explains the rationale for the target net zero dates we have chosen.

Castlefield operations and supply chain

We commit to making our own operations and supply chain net zero by 2030

Climate science tells us that it is fundamentally important to make significant emissions reductions this decade. Therefore, for the emissions sources that we control, Castlefield commits to making substantial reductions as quickly as is feasibly possible.

Hence the 2030 target for our own operations, which is some 20 years ahead of the legally binding commitment for companies in the UK to become Carbon Net Zero by 2050.

This reflects our view that it is important that all businesses, large or small, take responsibility for their direct carbon footprint.

Castlefield investment portfolio

We aim to achieve net zero in our investment portfolio by 2040

An important first step on the path to net zero is understanding the existing level of commitment that the companies in our funds have made to reducing their carbon footprint.

Whilst we do not have direct control over the emissions from the companies that we invest in, Castlefield has an investment approach that seeks out companies with excellent environmental credentials, and that can help towards society becoming Net Zero.

A 2040 deadline, or a decade before investee companies would be legally obliged to be Net Zero, is a challenging target. Castlefield’s commitment to engaging with companies will be instrumental in achieving this goal and our clients would expect us to be ambitious, hence the 2040 target for our investment portfolios.

Portfolio company net zero targets

In a similar fashion, we have been monitoring the extent to which the companies that we invest in have set net zero targets. We’ve recently revisited the analysis that we carried out six months ago based on the previous data set and there has been a significant increase in companies making net zero pledges, no doubt influenced, in part at least, by the COP 26 climate change conference that took place in Glasgow in autumn 2021.

It is heartening to see that since the last publication of data, all of our equity funds now have a much larger proportion of their weighted holdings committing to net zero targets:

  • 65% of the B.E.S.T Sustainable Income Fund has a Net Zero target up from 55%.
  • 43% of the B.E.S.T Sustainable UK Smaller Companies Fund has a Net Zero Target, a significant increase from 21% in our last analysis.
  • 45% of the B.E.S.T Sustainable UK Opportunities Fund has a Net Zero target compared with 34% in our previous analysis.
  • 40% of the B.E.S.T Sustainable European fund now has a Net Zero target compared to 38% of the fund when we conducted our last analysis.

We intend to keep talking to the companies that we invest in over the year ahead to stress the importance of adopting ambitious net zero targets with strong interim goals to ensure that steep emissions reductions are carried out this decade.

Further details of our net zero commitments and the targets in place for our equity funds (by holding weight) can be found in our Annual Stewardship Report here.

Written by Ita McMahon

Image Dynamic Earth - Ocean Currents by NASA Goddard Space Flight Center. Image sourced here. License terms available here. The image has been cropped.