A few months have passed since we last updated you on progress with our Conscious Capital Commitment. We'd like to take this opportunity to share with you some of our most recent developments in this area.

How Sustainable Are We?

In our last update, we touched on the importance of understanding our current position through gathering ESG data. Over the last few months, our ESG reporting team have been busy calculating a new overall score for our organisation using the World Economic Forum's 55 ESG reporting metrics.

These metrics take into account a broad range of activities and are used by companies to align their mainstream reporting on performance against environmental, social and governance (ESG) factors, and to track their contributions towards the Sustainable Development Goals.

Having first measured our business against the WEF's criteria in 2021, we arrived at a score of 59%. Since then, through introducing a number of measures and making positive changes to the way our business operates, we have improved our score to 64%.

This is a promising start which shows that we are on track to achieve our goal of a 70% score by the end of 2022.

Our Journey to Carbon Neutral:

We have recently had our carbon consumption audited for the third financial year which has highlighted a continued reduction in emissions, both in tonnes of carbon per full-time staff member and in totality. Year-on-year, we have seen a reduction of 17% and, compared to 2019, a reduction of 53%. The below table shows a break down of our emissions.

With the staff commute a significant contributor to our carbon footprint, one of the main focuses of the Conscious Capital Forum has been encouraging staff to switch from petrol or diesel vehicles to either active travel, public transport or electric vehicles.

Compared with 2019 (pre-covid levels), we have reduced emissions by 38%, whilst increasing headcount in the same period. We have achieved this through the commitment of our employees, as well as through initiatives such as our cycle to work and electric vehicle schemes. 25% of our staff are now actively commuting to work at least one day per week; a further 18% are car sharing or using public transportation; and 10% of staff now use electric or hybrid vehicles.

In addition to the reduction in our commute emissions, we planted 2,500 native saplings across two sites on the Isle of Man in Q1 2022 and with the winter season fast approaching in South Africa, we will be continuing our planting initiative there with GreenPop. Although we do not use tree-planting as an offsetting measure within our reporting, the contribution to carbon sequestration and enhancement of biodiversity follows a holistic approach to improving the natural areas in which we operate in.

Capital in the Community:

The Group is sponsoring Hospice Isle of Man’s Big Splash Project, which involves 32 life-size painted dolphin sculptures being placed around the Isle of Man as part of a trail for families to follow.

Over the last few months, we have been working closely with a local artist to create an interactive dolphin that will stand out along the trail. Hospice is a charity that many of our employees have encountered at some point in their lives, and we are proud to be supporting their invaluable work in this way.

In South Africa, our support of Cape Town charity, Souper Troopers continued, with Group Chairman Anthony Long, recently visiting the Humanity Hub and the Bo-Kapp Community Garden run by the charity. You can read more about Anthony’s visit in his blog post on the topic.

Employee Wellbeing:

All members of our Senior Leadership team recently undertook Mental Health First Aid Training, enabling them to better understand how colleagues can be impacted by their mental health, what to look out for in terms of behavioural changes and how they can help.

The wellbeing team also recently picked up a highly commended award from mental health charity InsideOut for the category 'International Employer of the Year'. This is a fantastic accolade which highlights the great work our team are doing in organising wellbeing activities and initiatives for colleagues.

Ethical Investments:

In our Q4 ethical investments update, we featured the addition of three sustainable forestry and agriculture assets into the alternative allocations for Fusion ESG. We did this on the basis that they would provide inflation protection and diversification into an asset class that has low volatility and exhibits negative correlation to equities.

These additions have proven particularly valuable both from a financial and ESG perspective. In particular, the Gladstone Land Corporation position has provided us with significant returns being up 14% over the quarter whilst global equities were down 5.36% (MSCI ACWI NR).

We decided to take the profits from this position and will be building a further position in our ESG alternatives allocation with the addition of Brookfield Renewable Partners. This position will strengthen our direct exposure to Clean Energy, with Brookfield due to add 62 Gigawatt capacity to their existing 21 Gigawatts of operating solar, wind and hydroelectric power.

The Ukraine Crisis has accelerated the demand for clean energy with a focus on future energy security. Brookfield are ideally positioned to benefit from this transition through their growing global footprint.

From an environmental perspective, their ambition is to double their avoided carbon emissions by 2030.

At a portfolio level, this position will help us to reduce the carbon footprint of our discretionary assets as well as strengthen our commitment to decarbonisation.

Thank you for taking the time to read our Conscious Capital update. Our drive to improve is something we hope is shared by others and by bringing you along on our ESG journey, our aim is to inspire, as well as reassure you, that we are doing our utmost to ensure our business has a positive impact on the planet and society.

Disclaimer: The views, thoughts and opinions expressed within this article are those of the author, and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.