Wellcome announces net zero strategy for its investment portfolio

Wellcome today announces a net zero strategy for its £29 billion investment portfolio, designed to help the foundation drive down the real-world emissions of the businesses and assets it invests in. 

Wellcome will seek to accelerate the global energy transition through a process of engagement, encouraging companies in its portfolio to make decarbonising their operations a priority. The plan will put Wellcome’s investments portfolio on a pathway to become carbon net zero by 2050 at the latest. 

The strategy prioritises driving down real-world emissions and Wellcome will seek to bring about change in businesses’ behaviour through a process of engagement and regularly evaluating the progress each of its investment assets is making. 

Wellcome is encouraging the managers and companies in which it invests to follow Task Force on Climate-related Financial Disclosures recommendations, the global standard for climate related disclosure. Wellcome is also joining the Institutional Investors Group on Climate Change to assist with its engagement efforts and encourage the development of quality emissions reporting standards. 

Wellcome, one of the world’s largest foundations, supports science to solve urgent health challenges, among them the negative impacts of climate change on health. The new strategy also seeks to address the risk that climate change presents to the sustainability of Wellcome’s long term investment returns and its future ability to fund its mission.  

An external analysis showed that the carbon footprint of Wellcome’s public equity holdings is already comparatively low – less than 30% of the relevant global benchmark’s (1) – with relatively little exposure to the most carbon-intensive businesses. However, recognising that it is the forward-looking trajectory that is most important for real world emissions, Wellcome will now report annually on the proportion of its investment portfolio by value with a company-declared net zero target (21% of total gross assets (2)), and on the proportion with a science-based net zero target (13% of total gross assets (3)), in order to evaluate progress towards its net zero goal.

No part of the world is immune from the harmful effects of climate change, whether through rising sea levels, deforestation, drought, or extreme weather events. 

As a major investor we have both a responsibility and an opportunity to encourage businesses to focus on decarbonisation. We want to use our influence to accelerate the rate of progress in this area. 

Many companies are aware of the need to lower their carbon emissions. It’s our role as an investor to prompt those who have not started making changes to do so urgently, while encouraging those who are doing so to go further.

Julia Gillard, Chair of Wellcome

Our net zero strategy continues our longstanding commitment to ensuring that the businesses we have invested in are working towards the energy transition, but represents an increase in the rigour with which we will evaluate and pursue progress. We want to encourage real world changes in business operations and thereby push down emissions. 

We will work with companies to ensure that environmental and social factors are prioritised alongside meeting their financial goals. The strategy is focused on consistent, positive engagement with the companies we are invested in. We will do this across all asset classes, although we recognise that different parts of the portfolio will move at different speeds.

We ultimately believe that it is only by becoming environmentally sustainable that any business can be sure of financial sustainability in the long term.

Nick Moakes, Chief Investments Officer at Wellcome

Notes to editors 

  1. Conducted Q4 2019. Source: Trucost. 

  2. Figures as of 31 Dec 2020. Source: CDP and company websites. 

  3. Figures as of 31 Dec 2020. Source: SBTi website of companies taking action.

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