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Our plan to address the climate crisis

Sustainability has always been at the core of our culture and how we run our business. We approach sustainability from first principles. We are sustainable investors because it is the right thing to do.

The climate crisis is the most fundamental challenge the global economy faces. The climate crisis refers to global warming and the resulting increase in weather events driven by the emissions of greenhouse gases.

Despite recent momentum, government action to tackle the climate crisis has so far been highly insufficient. Climate change is now a widely established and socialised concept within financial markets – both as a financial risk, due to transition and climate-related risks, and an investment imperative, because the way in which we direct capital will support (or hinder) climate targets.

Here we set out our approach

We commit

We support the Paris Climate Agreement of limiting global warming to +1.5°C versus preindustrial levels. We do this by committing our investment portfolios to net zero carbon emissions by 2050.


We support global emissions reduction of 50% by 2030, with baseline year 2019. This informs our asset-class decarbonisation targets.


We support the concept of ‘fair share’ decarbonisation targets. In other words, countries with historically higher emissions (which tend to be developed markets) should decarbonise more rapidly than countries with historically lower emissions (which tend to be emerging markets).


This is our default position – in our fiduciary management, our advice and our liability driven investments.

We measure

We are measuring our investments’ carbon footprint, its current greenhouse gas emissions, and its contribution to climate change. We use MSCI data.


We do this to measure:


• Our financial risks, including transition risks, physical risks and environmental opportunities.


• Our real-world impact, to align our capital allocation and engagement with our commitment of limiting global warming to 1.5°C.


We measure our portfolio financed emissions per pound invested, based on enterprise value including cash (EVIC). This is the primary measure that we will use to set targets and decarbonise our portfolios’ carbon footprint over time.


Climate justice is critical to the success of the Paris climate agreement. For government bonds, we favour CO2e per capita for carbon foot-printing. In addition, we look at historical emissions, ‘fair share’ carbon budgets, and how emissions will evolve over time.

We invest

We integrate sustainability – and climate change in particular – in our investment processes.


We invest in green bonds. We assess both the sustainability of the issuer and the issue. Green bonds can support companies in less sustainable sectors achieve their transition, for example, a cement company that is looking to finance activities that decrease the carbon emissions of production.


Green and sustainable bonds can trade at a premium to their grey (or conventional) counterpart. Increasingly we are comfortable with the premium. First, we consider it a factor in the overall qualitative assessment of the investment. Second, while the supply is growing, demand is growing more quickly, which could lead to a widening premium, which benefits an active strategy.

We invest in low carbon equity. Our preference is to engage (and change behaviour) rather than divest. That said, in the same manner that some investments are judged to be too risky irrespective of returns, some investments will be judged to have too negative a real-world impact, in particular, with regard to systemic issues, such as climate change or respect for human rights. This is why we have allocated – and will continue to allocate – to low carbon physical equity.

We believe scenario analysis helps inform our investment decisions.

Our three favoured scenarios are:

A 1.5°C degrees Paris-aligned transition – this is our goal, how we direct our capital and how we engage. This assumes measures are taken that will keep the rise in temperature limited to 1.5 degrees.

A 2°C degrees late transition (or, ‘inevitable policy response’) – this is our forecast of what we think will happen.

A 3°C slow transition – this is our book-end scenario.

We engage

While we do not invest in single equities, we do invest in single credits, including sovereigns, and we do have high expectations of our managers’ stewardship activities, including engagement and voting consistent with the Paris climate agreement.


We favour engagement that is long-term, collaborative, and prioritises real-world impact, such as reduction in absolute carbon emissions.


We are signatories to the UK stewardship code and Climate Action 100+.


We see policy engagement as a natural extension of our net zero commitment. We recognise the need to improve the sustainability of the market as-a-whole and that there are clear benefits to us and our clients through well-designed and implemented sustainable investment policy reform.


In particular, we will respond to policy consultations relevant to sustainable investment in the UK, Netherlands and Europe, and we will offer our expertise and experience where it is appropriate to do so.

We collaborate

We see collaboration as part of the way we can contribute to a more sustainable financial system. By coalescing around common themes and methodologies, we send clear messages to the companies we own – and to our regulators. Collaboration allows for a faster, smoother transition.


We believe net zero is a collective action problem. While we can align our portfolios with net zero, ultimately we need to move the market as-a-whole to protect our beneficiaries from the environmental and financial consequences of climate change.


The climate crisis is not properly priced in markets, which is why it warrants attention – or in other words, markets are financing investments that remain profitable in the short-term, but are inconsistent with long-term environmental and financial goals.


We are members and supporters of a number of sustainability organisations, including PRI, IIGCC, PCAF and the Net Zero Asset Managers Initiative.

We offset

We measure and minimise our own firm’s carbon emissions, for example, we’ve selected a green energy supplier for our Rotterdam office and we seek to minimise travel or take the train where possible. Where we do have emissions, we offset.


For 2020, the Cardano Group emitted 491 tonnes of carbon dioxide. Our report, prepared by South Pole, is available on request. Our chosen offset is Cookstoves for Maasai Communities, Kenya, which has links to BIX Capital, an impact investment initiative funded by Cardano Development.

Women in bubble looking over green and city

Finally, we adapt

Sustainability – and climate change in particular – is a dynamic concept.
We are owner-managed, which gives us the freedom to try new things and to do things differently. We know the data is imperfect and the methodologies are still under development, particularly for hard-to-reach asset classes such as private equity, infrastructure or derivatives.


Our approach will evolve as our understanding of science, technology and corporate and investment practice evolves. We will update our net zero commitment periodically to ensure we’re at the forefront of addressing the climate crisis.

Net Zero Investment Consultants Initiative

Progress Report 2023

Cardano is a founding signatory of the Net Zero Investment Consultants Initiative. Signatories to the initiative commit to nine principles around Net Zero. We are pleased to have published this report outlining our progress.