Impact Report 2023: Our impact on the environment – a team of environment champions

Calculating and offsetting our carbon emissions, reducing energy usage, and making changes that count are the key reasons why our B Corp Environment score jumped 118.9% in 2023.

One of our core values is that ‘actions speak louder than words’. When it comes to the environment, it’s what we do that matters most. Our score improvement is largely down to iterative changes we’ve made, including:

Calculating our carbon emissions: we have set science-based targets and are tracking emissions against these, aiming to go further and reach our net-zero 2030 goal. We plan to review our calculation method and report monthly instead of annually to respond faster if emissions rise.

Reducing energy use: we installed energy monitoring, sought expert advice about our Bristol office, and invested £18,500 on energy efficiency measures (receiving a grant of £7,300). We also hope the installation of the EV-charger at our Bristol office, and our electric company car scheme (available to all) will encourage partners to move to electric vehicles. Clients can also make complimentary use of the charger when they visit.

Our environmental management system (EMS): we thought carefully about the ways we impact the environment, including – carbon emissions, recycling, and electrical items. Our new EMS details these elements and helps us identify areas of improvement. One example is around the procurement of supplies for our Bristol office.

Offsetting: As we attempt to reduce our emissions each year, we continue to purchase high quality offsets for the emissions we haven’t been able to avoid. We are reviewing offset projects for 2022-23. For our travel emissions, we are piloting a new booking system with COCO+ Travel, a fellow B Corp, that offsets business travel as it’s booked.

Our volunteer ‘environment champions’ are helping to unify these adjustments across the organisation. It’s these small everyday changes that can have a big overall impact.

Calculating the carbon footprint of our investment portfolio

“Measuring emissions makes it possible to assign a cost to them, incentivising reductions.” David Burridge, Investment Committee Chair & Client Manager

As part of our efforts to inform and educate clients, we shared in our last Impact Report that we are exploring ways to report on the carbon intensity of our investment portfolios.

Just like investors track the financial performance of companies, it is crucial to also track their environmental impact. This includes measuring how much carbon dioxide is released into the atmosphere as a result of their operations.

This information is not yet universally available, but it is essential because it can be used to drive positive change. By quantifying companies’ emissions, there is the potential to assign a price to them, essentially making companies pay for the environmental damage they cause. This creates an incentive for companies to reduce their emissions, as it will lower their costs.

How your pension or investments are invested can indirectly support significant carbon emissions.

Research suggests that the UK pensions industry indirectly finances more CO2 than all UK carbon emissions. This is mainly due to global investments in fossil fuels and high emitting companies. So, investors have both the opportunity and responsibility to influence positive change.

Unfortunately, simply divesting of the highest emitting companies is unlikely to reduce emissions. These companies are likely to continue polluting, whether you hold them in your portfolio or not.

We focus therefore on choosing fund managers who engage robustly with companies on behalf of clients. Fund managers can use investors’ shareholder voice and voting rights to influence company behaviour to be aligned with carbon reductions. This may provide the best chance that Paradigm Norton and our clients have of using our influence as investors to achieve reductions in emissions.

When trying to influence companies, it is important to have the option of targeted divestment as the ultimate sanction, where companies are wilfully failing to act to reduce emissions, in response to requests by investors. Divesting on this basis can send a strong signal, demonstrating to the companies, as well as governments and regulators, that action needs to be taken.

We see improved reporting on the carbon emissions of companies in portfolios as an important first step in better holding these companies to account.

Our next steps

We are close to being ready to report on our portfolio emissions but are yet to make reporting available to clients because it needs more research. We want to be sure of two things – firstly that it’s useful and we communicate the important nuances of the issue, and secondly, we want to have confidence in the strength of our calculations.

Our aim is to provide clients with rigorous reports that lift the veil on this hidden element of a carbon footprint. Look out for more to come on this and on the responsible nature of our portfolios more generally.

Our B Corp score increased by 118.9% in the environment category. To find out more, download our Impact Report 2023 – A big step forward.

2023 impact report

The value of an investment and the income from it could go down as well as up. The return at the end of the investment is not guaranteed and you may get back less than you originally invested.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated.

Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

This article is distributed for educational purposes and should not be considered investment advice or a recommendation of any particular security, strategy, or investment product.