That analysis concluded that Sun Life Financial funds no less than 121 million tonnes of CO2 equal emissions inside its funding portfolio, primarily based on obtainable information that Profundo extrapolated to an estimated 222 million tonnes. The analysis assumes that the typical emissions depth of the publicly-disclosed information prolonged to its complete portfolio.
On the identical foundation, the corporate estimated that Manulife funds no less than 115 million tonnes, primarily based on obtainable information, which it extrapolated to 277 million tonnes for all the portfolio — once more, extrapolating from common emission depth.
The report acknowledged that these estimates are “imperfect,” however nonetheless pressured that they spotlight the corporations’ significance within the capital markets, and in addressing the specter of world warming.
“As major owners and managers with almost $3 trillion in [assets under management], Sun Life and Manulife have a huge influence over capital flows and whether those foster increased emissions or the necessary rapid transition to a clean energy economy,” it mentioned.
The report famous that each corporations have dedicated to attaining net zero of their financed emissions by 2050. “Both are taking steps towards implementation,” the report mentioned.
To that finish, it additionally set out suggestions for the corporations to meet their goals, together with measuring and disclosing financed emissions (together with materials scope 3 emissions); setting discount targets; and adopting portfolio decarbonization methods to meet these targets.
“Sun Life and Manulife have much work to do to decarbonize their portfolios, and there is an urgency to act,” the report mentioned.
Manulife is “exploring all mechanisms to achieve decarbonization to meet our emission reduction targets,” mentioned Sarah Chapman, chief sustainability officer with Manulife, in a press release emailed to Advisor’s Edge.
“We welcome the opportunity to engage with stakeholders like Investors for Paris Compliance and we are open to listening to new thinking,” mentioned Alanna Boyd, chief sustainability officer with Sun Life, in a press release emailed to Advisor’s Edge. “Last year, we shared our net-zero goals and since then we have been taking the necessary steps to work towards achieving this objective, while meeting our fiduciary responsibilities.”
The problem of measuring, disclosing and combatting emissions depends — partly — on the adoption of widely-accepted disclosure requirements.
Last 12 months, the Canadian Securities Administrators (CSA) proposed new climate-related disclosure necessities, however these proposals didn’t envision necessary disclosure.
While the CSA has but to finalize its necessities, each the U.S. Securities and Exchange Commission (SEC) and the International Sustainability Standards Board (ISSB) have since proposed stiffer necessities of their very own.
It stays to be seen the place regulators land on climate-related disclosures, which is a prerequisite to traders precisely measuring and addressing their very own exposures.