Our environmental impact

At Rathbones, we recognise our responsibility to contribute to the transition and we are focused on measuring and reducing our operational footprint as well as that of our investment portfolios. It is our responsibly to understand how every cog in the Rathbones wheel is affecting the planet.

For our clients, we have a responsibility to understand how climate change may impact our portfolios and what we can do to minimise the risks, be they physical or transitional. We believe that to deliver our best for our stakeholders we must, think, act and invest for everyone's tomorrow. One aspect of this is the commitment we made public in 2021, to achieve net zero emissions across the group by 2050 or sooner.

Our net zero commitment

Rathbones Group Commitment

In July 2021, the group announced its intention to be a net zero emissions business by 2050 or sooner. This ambition aligns with the need to limit warming to no higher than 1.5^oC above pre-industrial levels. Using 2020 as our baseline year, and having undertaken a full emissions inventory, we used the Science-Based Targets initiative (SBTi) methodology to set our operational and investment targets. Our near-term targets were validated by SBTi in October 2022. To deliver on our commitment we need to reduce emissions across our business, including the investments we make on behalf of our clients.

Whilst our commitment to becoming a net zero business by 2050 or sooner includes both our direct operations and our investments, we recognise that the majority of our greenhouse gas emissions and other climate-related risks are focused on the investments we hold. However, reducing our operational footprint remains a core focus for the business.

Our SBTi validated target is to reduce our scope 1 and 2 emissions by 42% by 2030, from a 2020 base. We believe that the investment in digitising our business and completing the transition of our offices to renewable energy sources by the end of 2025 will help us to meet our 2025 internal target of a 21% reduction across our scope 1 and 2, and scope 3 emissions (excluding investments).#

Our near-term target for our Scope 3, category 15 emissions, commits 35% of our listed equity and bonds holding, by invested value, to committing to or setting SBTi aligned targets by 2025, 57% by 2030, and 100% by 2040. Achieving 100% portfolio coverage by 2040 is the SBTi requirement. This allows 10 years for companies to deliver on their net zero commitments.

In addition to these group targets, Rathbone Greenbank Investments (Greenbank), Rathbones’ specialist ethical, sustainable and impact investment arm, announced its plan to reach net zero emissions by 2040 (including operations, supply chain and investments). Greenbank followed the Net Zero Investment Framework (NZIF) to set targets covering the investments it manages. Steps have already been taken to make quantifiable achievements in each of the three scopes that the Greenhouse Gas Protocol has identified.

Progress towards all these targets will be tracked through group’s annual public reporting. Both group and Greenbank will disclose their net zero strategy to the Net Zero Asset Managers Initiative, which they joined in 2021.

In addition to the group commitment, Rathbone Greenbank Investments (Greenbank), Rathbones’ specialist ethical, sustainable and impact arm, has detailed its plan to become a net zero emissions business by 2040. This commitment covers emissions associated with its operations, supply chain and investments.

Greenbank’s net zero emissions plan includes:

a cut of 60% in the carbon intensity of its investments by 2030, with 2020 as a baseline year
a continuation of its long-standing strategic engagement programme to encourage corporate action on climate change and drive alignment to net zero emissions
a commitment to reach net zero carbon emissions from its own operations and supply chain by 2030, in line with group, using the Science-Based Targets Initiative (SBTi) framework, an internationally recognised methodology.

Greenbank has followed the Net Zero Investment Framework (NZIF) to set targets covering the investments it manages. Since November 2019, Greenbank has worked alongside over 70 other investors, representing $32 trillion in assets under management, as part of the Paris Aligned Investment Initiative to develop the NZIF. The NZIF is a strategic framework which asset owners and managers can use to maximise their contribution towards net zero emissions. Greenbank also discloses this net zero strategy today to the Net Zero Asset Managers Initiative, which it has been a signatory to since March 2021. Greenbank followed the Net Zero Investment Framework (NZIF) to set targets covering the investments it manages. Steps have already been taken to make quantifiable achievements in each of the three scopes that the Greenhouse Gas Protocol has identified

^Footnote
^{1: Scope 1,2 and 3 as defined by the}^{WRI GHG protocol}

The impact of our investments

As a wealth manager, we recognise that climate risks can materially affect the performance and valuation of our clients’ investments. We therefore have a duty, as stewards and allocators of capital, to understand how climate change can impact the investment we make on behalf of our clients and to allocate assets to minimise climate risks, be they physical or transitional. Companies that set ambitious targets and credible implementation plans in line with achieving net zero emissions will become increasingly attractive investment propositions. Those that fail to do so will find themselves at a competitive disadvantage, exposed to regulatory risks and prone to finding their assets stranded.

To read about our approach please see our Responsible business update and our responsible investment pages.

Our operational footprint

We saw emissions increase in 2023, with purchased goods and services remaining the largest emissions source. As spend increased our emissions also increased, 33% since 2020 to over 4,000 tCO2e. Despite this, emissions grew slower than spending as cost was focused on lower-carbon services like legal and professional services and software support, leading to a reduction in emissions intensity. At the end of 2023 we had 19 sites using renewable electricity, which covers 65% of our total consumption. With 58% of clients now using MyRathbones this transition to digital communication supports our move away from printed resources. We decommissioned 16 physical servers and two storage devices in 2023, which allowed us to reduce our power draw by 15.31%.

For more information on our 2023 environmental impact please read our Responsible business update or Annual Report.

Collaborating to drive change

Carbon offsetting programme

We are committed to reducing our operational footprint on an annual basis. We recognise the need to compensate for our residual emissions and therefore continue to offset our operational footprint (excluding supply chain) in partnership with Climate Impact Partners. We identify nature-based projects which align their impact with the UN Sustainable Development Goals and are certified by internationally accredited bodies.

As we operationalise our net zero commitments, we are considering our long-term approach to carbon removal. We have already shifted our annual offsetting to nature-based solutions and will work with partners to put projects in place that will allow us to expand our removal capability, initially covering our operational footprint and then expanding to cover our supply chain from 2030.

To learn more about or approach in 2023 see page 30 of our responsible business update.

Reporting our progress

As part of our commitment to transparency, we will share updates on our progress through our annual reporting. As a business we continued to support CDP (formerly the Carbon Disclosure Project), both as an investor and as a responding business. Our score of B reflected the inclusion of our net zero commitment and associated near-term targets.

We support the work of the Task Force on Climate-related Financial Disclosures (TCFD). A summary is included in our annual report and we produce a standalone document to communication our alignment to the eleven recommendations.

Allied to the work being undertaken by our business to integrate environmental, social and governance data into our investment decisions and engagement process we have created a cross-functional team to oversee our approach. The responsible business committee has oversight of both our responsible investment programme and our environmental programme and supports their interaction as well as approving our TCFD, Principles for Responsible Investment PRI and CDP disclosures.

For more information read our responsible business report, TCFD report and our group climate statement.

Following the outcomes of the climate talks in Glasgow (COP26 in 2021), and the continued strengthening of commitments from governments and regulators supporting the transition to a net zero emissions economy, the need for business to understand and act with regard to our climate impact will continue to grow. Our focus remains:

operationalising our net zero emissions plan, including the engagement of our suppliers
review of our data collection process, both operational and for our investment exposure
expansion of our reporting on the financial implications of climate change to include a broader client population.