Scottish funds giant Abrdn sets out 'climate commitments' amid net-zero finance centre goal

Abrdn, the investment giant formerly known as Standard Life Aberdeen, has pledged to cut the “carbon intensity” of assets it manages by 50 per cent by the end of the decade.

The firm said it has developed a climate change strategy focused on net zero directed investing, which involves moving towards the goal of “net zero in the real world”, not just in its portfolios.

It aims to achieve this goal through a set of actions, including “rigorous research into net-zero trajectories, developing net-zero-directed investment solutions and active ownership to influence corporates and policy makers”.

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The pledge comes as financial institutions and listed companies are set to be forced to publish their plans on how they will transition to net zero, in sweeping reforms Rishi Sunak hopes will halt so-called greenwashing. The Chancellor plans to make the UK a net-zero financial centre.

Chief executive Stephen Bird: 'At abrdn we are acutely aware of our obligation to support the drive towards net zero.'

Abrdn has also set a target of net zero for its own operations by 2040.

Chief executive Stephen Bird said: “At abrdn we are acutely aware of our obligation to support the drive towards net zero. That’s why I’m pleased we can announce these climate commitments – both for the investments we manage and our own operations - which build on those we made earlier in the year.

“But we must be very clear: simply moving our clients’ money out of high-carbon intensity stocks into greener options will not solve the world’s crisis. Decarbonising a portfolio is not the same as decarbonising an industry.

“To achieve that we need effective engagement with companies, because more seismic change will come from backing credible transition firms on their path from high to low carbon intensity.”

He added: “Effective incentives in the form of appropriate carbon pricing are absolutely critical to enable capital allocation in line with net zero and to create an investment environment which rewards companies and investors that go green.

“We also need a proper debate and action on the role of the tax system in the transition. Pricing carbon needs to be focused on changing behaviours, and ensuring a just transition, on a national and global scale.”

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In August, the Edinburgh-headquartered funds group warned of further market volatility amid the fallout from the pandemic as it hailed a “strong start to the year”.

Unveiling first-half results, Bird said “good progress” was being made with the firm’s turnaround strategy.

The recent controversial name change is part of a wider shake-up aimed at putting the business back on a growth path by focusing on asset management, financial adviser technology, and direct-to-customer wealth management.

The interim results showed that fee-based revenue was up 7 per cent on a year earlier with adjusted operating profit 52 per cent higher at £160 million. They mark the highest rates of growth since the 2017 merger of Standard Life and Aberdeen Asset Management.

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Assets under management and administration came in at £532bn, broadly flat as reductions due to flows and corporate actions were partially offset by “positive” market movements. An interim dividend of 7.3p per share was declared.

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