Verco have completed a series of fund-level net zero carbon pathways for a number of abrdn’s ‘Pioneer’ funds and are continuing to deliver this project for further ‘Phase 2’ funds.
abrdn is one of the world’s largest investment companies which invests worldwide on behalf of clients globally across its major asset classes - equities, fixed income and real estate as well as tailored solutions. As of Dec 2021, abrdn manages £542 billion of assets, making it the largest active manager in the UK and one of the largest in Europe, with £48 billion real estate assets under management.
As a signatory of the BBP Climate Commitment, abrdn is committed to achieve Net Zero by 2050, and has set a target to improve the emissions intensity of assets they manage by 50% by 2030, from a 2019 baseline.
- Create an evidence base to support the development of fund-level net zero carbon action plans, in order to assist abrdn in achieving its 2050 net zero target for global direct real estate investments.
- Produce outputs consistent with abrdn’s house standards.
Verco started work in May 2021 with a rolling programme developing fund level NZC pathways, the work is ongoing.
For each fund, Verco carried out the following:
- Calculated a baseline of carbon emissions (covering all scopes)
- Modelled a 'business as usual' approach against current portfolio and growth plans
- Developed a fund-level net zero carbon pathway consistent with the global framework.
- Developed asset-level energy use intensity pathways consistent with leading net zero industry definitions CRREM and the UK Green Building Council
- Modelled the cost and performance implications of achieving net zero standards by asset including recommendations on the extent of energy efficiency, on site renewable energy, low carbon HVAC and fabric refurbishment measures
- Calculation of the scale of residual carbon emissions following implementation of measures
- Risk analysis categorising assets against operational, financial and practical risks
- Presented results to the fund management team, key stakeholders and investor communities, as appropriate for each fund.
- A comprehensive and industry leading fund position on net zero carbon which is compatible with house strategy.
- Clear and actionable fund level insight underpinned by asset-level recommendations.
- A fully briefed fund management team who understands the implications of the NZC journey and practical steps to translate this into new business practices, including investment and development activities.
- We are now supporting the business by performing more in-depth net zero audits on specified assets identified by this work.
Verco was appointed onto our net-zero consultant panel to assist in the development of net zero carbon pathways for a number of abrdn’s Pioneer funds. Subsequently, we have retained them to continue this work as we roll out the pathways for the next group of funds as part out of our net-zero carbon framework. Verco worked alongside the abrdn’s ESG team and funds to integrate their advice and market insights with thorough carbon foot printing and forecasting, to deliver clear priorities under relevant Net Zero pathways. Fund managers have come away with an understanding of the regulatory, market and fund-specific factors influencing the level of ambition required in the fund to achieve net zero. We are looking forward to progressing our pathway work with Verco through additional funds and next level asset specific analysis.