Climate change is one of the most pressing problems facing our world today. It affects everyone - from families worrying about their children’s futures, to where we invest. The science is clear: to avoid the worst impacts of climate change, business, government, and society need to work together to transition to a net zero economy sooner, rather than later.
In late 2019 EQ Investors (EQ) committed via the B-Corp Climate Collective to accelerate the reduction of its own greenhouse gas emissions to reach a 1.5 degree trajectory and a fully net-zero carbon business by 2030. This is 20-years earlier than the 2050 target set in the Paris Climate Agreement.
Rather than running its own Net Zero Pledge, the B Corp Climate Collective is now collaborating with key partners. One of these is the SME Climate Hub initiative, an official partner of the UN’s Race To Zero campaign.
We’ve committed to the SME Climate Hub initiative, and have taken immediate action to:
We are listed as an official member of the SME Climate Hub Initiative and the UN’s Race to Zero campaign.
In addition to these formal expectations, EQ also proposes to set an additional target on other material operational Scope 3 emissions (50% reduction by 2030 from a 2021 baseline), and develop a net zero strategy for the investments made on behalf of our clients[1].
Using the framework of the greenhouse gas protocol, EQ has assessed it’s material emissions. The protocol helps to break down all emissions that are under the direct control or influence of a business, and thus under its responsibility.
As per the expectations of the SME climate hub, our commitment is mandatory only across Scope 1 and 2 emissions and business travel (part of Scope 3), but we also need to consider our approach to other material Scope 3 emissions, hence we include these in our pledge and plan.
EQ’s investment team is working on a project that will result in recommendations on net-zero targets for our investments, engagements and respective reporting. We will follow best practice frameworks and methodologies from the investment industry which fall out of the SME climate hub commitment. [1]
| Aim | Short term actions (this year) | Medium term actions (next 5) |
|---|---|---|
| Scope 1 & 2 – absolute zero 2030 | Measure Scope 1,2 emissions. Offset these using high-quality removal carbon credits | Engage with office building management company to achieve zero-emissions energy supply. |
| Scope 3 (operational) – 50% intensity reduction | Measure Scope 3 supplier emissions, including by estimations. Adjust EQ expense form to encourage lower-carbon transport. Engage with other B corps on common suppliers for better data disclosure.
Offset these emissions using high-quality removal carbon credits. | Establish engagement milestones for top 10 suppliers.
Switch suppliers where possible to those with net zero commitments, transparent emissions data, lower footprints. |
| Scope 3 (investments) | Conclude phase 1 of net-zero investment target project, including: review of frameworks, peers, and benchmarking exercise, proposal of recommendation to senior management and board. | Implement net-zero investment targets across portfolio management, fund research, monitoring and engagement plan. |
The current net-zero commitment does not require EQ to offset all of its emissions until 2030.
However, we have done this voluntarily, making EQ a carbon neutral business since 2020. We aim to adhere as much as possible to the Oxford Offsetting Principles, which include selecting carbon credits that are additional, and result in long-lived carbon reduction from the atmosphere and storage.
The voluntary carbon offsetting market is not highly regulated, resulting in a vast dispersion in the price per tonne, starting as low as 1 USD/tCO2. Pricing is mainly factor of market forces, and voluntary demand for certain projects versus others – not a real reflection of the price of carbon. From existing regulated carbon markets (EU has longest established market), we can derive a more accurate price per tonne. Until there is greater regulation of the carbon offset market, EQ will use the EU average annual carbon permit price in the reporting year to set a budget for EQ’s voluntary offsetting activities.
The remaining budget after offsetting the full operational carbon footprint each year with high-quality offsets will be donated to charities supporting the systemic change needed for climate action.
EQ commits to disclose updates on the short and medium term plan, annual carbon footprint measurement and details on any carbon offsetting initiatives.
Sophie Kennedy
Joint-CEO | EQ Investors
