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SEPTEMBER 9, 2022
Anna Murray, Managing Director, Global Head of ESG at SLC Management, discusses SLC Fixed Income’s commitment to the Net Zero Asset Managers initiative and how we’ll work together with our clients on their decarbonization goals.
Steve Peacher: Hi everybody. Thanks for dialing in to this episode of “Three in Five,” and once again for the second time I’m joined by Anna Murray, who's a managing director and global head of ESG for us at SLC Management. So, Anna, thanks for taking some time today.
Anna Murray: Great to be here Steve.
Steve Peacher: We, of course recently announced at SLC Management that our investment grade fixed income business, SLC Fixed Income, is joining the Net Zero Asset Managers initiative, which is a big deal. So can you tell the audience, you know, what the Net Zero Asset Manager's initiative is all about, and why we joined it?
Anna Murray: Absolutely. So, the Net Zero Asset Managers initiative, or commonly known as NZAM, is a financial industry initiative for asset managers to reduce the emissions of their portfolios to net zero greenhouse gas emissions by 2050, if that's not a mouthful. So net zero by 2050 is what science tells us is needed to limit global warming to 1.5 degrees and avoid the really damaging impacts of climate change. For context, the world is already at roughly 1.1 degrees warming, and we're already seeing devastating impacts such as extreme drought in southwest U.S., extreme heatwaves in Europe, et cetera. So of note NZAM already has more than two hundred and seventy asset managers around the world signed on. Now that represents well over $60 trillion worth of global AUM. NZAM is focused on financed emissions, which are the emissions that we are responsible for through our investments in products. Now net zero is an enormous challenge and governments can't reach these goals on their own. Instead, the financial sector has a critical role to play, so we joined NZAM because we believe that working proactively with our clients and borrowers towards an net zero target is a critical step in support of the transition towards a low-carbon economy. It will give us an edge in investment decision making, drive better performance and achieve a better environment for people everywhere.
Steve Peacher: One of the commitments that goes along with joining NZAM is that you're committing to work with our clients on their decarbonization goals. What will this look like in practice? You know what kind of information what we need to give them on their portfolios? What kind of support will they need from us so that our clients can reach their decarbonization and climate goals?
Anna Murray: Right. The NZAM commitment involves a number of actions. So, this is really about taking a comprehensive approach while recognizing there are limitations in what we as an asset manager can do, particularly in fixed income. So the first step is we'll be setting interim finance emissions targets for 2030. To get there will require us to do a number of things, for example, engaging with investees, being strategic in who we focus on and supporting them in the transition to a low-carbon economy. We're working to create new products that we can offer clients who want to invest in climate positive and low-carbon solutions. And we're also actively working on enhancing our data and reporting abilities to give clients better insights into the climate performance of their investments. It's really important that the focus is not just on reducing portfolio emissions, but dramatically scaling up climate solutions, expanding renewable energy, and developing new technologies. And we see big investment opportunities here. And above all, the focus needs to be on real world impact. For example, if we sell off a holding and it just gets bought by someone else, well, that doesn't really move the dial on reducing emissions. All of this is in the context of meeting our fiduciary duty to clients, of course.
Steve Peacher: All things ESG are moving at a kind of warp speed these days, so the regulatory environment is changing. Client demands are changing rapidly and increasing, certainly. And I think obviously asset managers like SLC Management have a big role to play in terms of creating the incentives through capital allocation as we transition to a lower carbon economy. So could you talk about some of the steps that SLC Fixed Income is taking from a data management and transparency perspective as part of you know, this whole effort?
Anna Murray: Absolutely. Hands down, data is one of the biggest challenges out there in this space. So for some assets, like investment grade bonds, data exists in terms of the amount and sources of GHG emissions. But for other assets like mortgages for the companies it's much more difficult, and you have to use proxies and make assumptions. This year we joined the Partnership for Carbon Accounting Financials or PCAF, which is an industry collaboration in the financial space around climate data and methodologies. And through PCAF we're working with our peers to sort through some of these really complex data issues. So we're putting considerable time and effort into expanding our in-house data and research capabilities which will allow us to further track the portfolio emissions of different strategies for clients and measure how we're progressing towards net zero. Delivering high value for our clients in terms of climate insights and reporting is a fundamental priority for us. Part of the NZAM commitment is really expanding the information and tools we can offer to clients to help them make informed decisions.
Steve Peacher: You know we're putting so much attention and resources at SLC and more broadly at Sun Life into what we can do as an investing institution, as a financial institution, to meet sustainability goals, to work with our clients, but also there's a lot that people can do individually. And so given that this is at the center of your professional life, I’m sure it also impacts, you know, how you and your family go about your daily activities given your personal obsession with sustainability. So, I thought it would be great to ask you, do you have any recommendations for those listening about what the kind of things they can do in their own lives if they want to improve their own sustainability profile as an individual?
Anna Murray: Absolutely. And this is probably my favorite question. So, simply put what's most important in our family and with our kids is to get back to nature. And in doing so we work towards truly enhancing their knowledge of and appreciation for biodiversity. So I know as a child the time I spent outdoors in the mountains, forest, or by the ocean, truly impacted my understanding and ultimate commitment to protect resources that we have. So, we do the same with our kids and try to make sure they fully comprehend how ecosystems work, the critical importance of preserving the natural habitat around us, and how we each hold responsibility in doing so.
Steve Peacher: Well, thanks, Anna. You know it's interesting because I think that so much of this is about a generational change, you're talking about the experience you had as a child. And now your kids have. And I think of my own children and how they are so much more tuned in to environmental issues than I was when I was their age. And I think that's going to make a huge difference over the coming years and decades in terms of the policy, because that's all going to filter into how institutions and governments think, as well as individuals. So, thanks everybody for listening to this episode of “Three in Five,” and Anna, thanks for joining us again.
Anna Murray: Thanks, Steve.
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About SLC Management
SLC Management is the brand name for the institutional asset management business of Sun Life Financial Inc. (“Sun Life”) under which Sun Life Capital Management (U.S.) LLC in the United States, and Sun Life Capital Management (Canada) Inc. in Canada operate.
Sun Life Capital Management (Canada) Inc. is a Canadian registered portfolio manager, investment fund manager, exempt market dealer and in Ontario, a commodity trading manager. Sun Life Capital Management (U.S.) LLC is registered with the U.S. Securities and Exchange Commission as an investment adviser and is also a Commodity Trading Advisor and Commodity Pool Operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act and Members of the National Futures Association.
BentallGreenOak, InfraRed Capital Partners (InfraRed), Crescent Capital Group (Crescent), and Advisors Asset Management are also part of SLC Management.
BentallGreenOak is a global real estate investment management advisor and a provider of real estate services. In the U.S., real estate mandates are offered by BentallGreenOak (U.S.) Limited Partnership, who is registered with the SEC as an investment adviser, or Sun Life Institutional Distributors (U.S.) LLC, an SEC registered broker-dealer and a member of the Financial Industry Regulatory Authority (“FINRA”) . In Canada, real estate mandates are offered by BentallGreenOak (Canada) Limited Partnership, BGO Capital (Canada) Inc. or Sun Life Capital Management (Canada) Inc. BGO Capital (Canada) Inc. is a Canadian registered portfolio manager and exempt market dealer and is registered as an investment fund manager in British Columbia, Ontario and Quebec.
InfraRed Capital Partners is an international investment manager focused on infrastructure. Operating worldwide, InfraRed manages equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed Capital Partners Ltd. is authorized and regulated in the UK by the Financial Conduct Authority.
Crescent Capital Group is a global alternative credit investment asset manager registered with the U.S. Securities and Exchange Commission as an investment adviser. Crescent provides private credit financing (including senior, unitranche and junior debt) to middle-market companies in the U.S. and Europe, and invests in high-yield bonds and broadly syndicated loans.
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AAM is an independent U.S. retail distribution firm that provides a range of solutions and products to financial advisors at wirehouses, registered investment advisors and independent broker-dealers.
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The information contained in this website is not intended to provide specific financial, tax, investment, insurance, legal or accounting advice and should not be relied upon and does not constitute a specific offer to buy and/or sell securities, insurance or investment services. Investors should consult with their professional advisors before acting upon any information contained on this website. The assets under management (AUM) represent the combined AUM of Sun Life Capital Management (Canada) Inc., Sun Life Capital Management (U.S) LLC, BentallGreenOak, InfraRed Capital Partners, and Advisors Asset Management.
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UK Tax Strategy - InfraRed (UK) Holdco 2020 Limited
InfraRed (UK) Holdco 2020 Ltd is the UK holding company of InfraRed Partners LLP and a subsidiary of Sun Life (U.S.) Holdco 2020 Inc, which has its headquarters in the U.S. The company was incorporated to purchase InfraRed Partners LLP and acts solely as a passive holding company. The Tax Strategy for the InfraRed Holdco Group sets out our approach to the management of InfraRed Holdco Group UK tax affairs in supporting business activities in the UK.
This UK tax strategy is published in accordance with the requirements set out in Schedule 19 of Finance Act 2016. The strategy, which has been approved by the Board of Directors of InfraRed (UK) Holdco 2020 Ltd, is effective for the period ending 31 December 2022. It applies to InfraRed (UK) Holdco 2020 Ltd and its dormant subsidiary Sun Life (UK) Designated Member Ltd, referred to as the “InfraRed Holdco Group”. InfraRed Holdco Group.