Manulife Investment Management, the world’s largest manager of natural capital with over $16 billion in assets under management in timberland and agriculture, has officially released three explicit reports that all dig into how it incorporates financially material climate, and nature-related investment considerations, into its asset management and portfolio construction capabilities. According to certain reports, each of the interested market participant can use the insights from Manulife IM’s Natural Capital Sustainability report, Task Force on Climate-Related Financial Disclosures (TCFD) report, and Sustainable and Responsible Investing (SRI) report to generate deeper awareness regarding sustainable investing, and to assess various investment risks and opportunities across public and private market asset classes. Having referred to the initial bits and bobs, we now must take a deeper view of the given proposition. For starters, the Manulife IM’s Natural Capital Sustainability report reveals that Manulife IM’s timberland investment properties, planted over 50 million seedlings, produced lumber to build more than 100,000 houses. To give you some context, this is enough fiberwood to make approximately 2.2 million tons of paper. Apart from that, the stated properties also yielded enough biomass to produce electricity for the equivalent of 1,500 American homes for a year. Next up, we must dig into how Manulife IM’s integration of regenerative practices across its agriculture portfolio continues to focus on producing more food with a smaller footprint. In fact, during 2023, 100% of its client properties reported using at least one regenerative practice, whereas 78% of the company’s properties currently use four or more regenerative practices.
Another detail worth a mention is rooted Manulife’s progress reports that, on their part, stretch across the company’s five nature targets, aligned with its Finance for Biodiversity Pledge which is on track to be fulfilled by 2025. The stated five targets, in case you weren’t aware, include improving collaboration and knowledge sharing on assessment methodologies, incorporating biodiversity into ESG policies, assessing the impact of investments on biodiversity, using science-based targets to improve biodiversity impact, and providing annual reports to measure and assess progress toward biodiversity goals.
“We are excited to share these reports with market participants as we believe that climate-related risks and other sustainability factors can have a material effect on long-term financial value and, as a result, on our clients’ investment objectives,” said Paul Lorentz, President & CEO of Manulife IM. “Throughout all of our investment processes, we seek to incorporate all financially material risks, including sustainability factors, as our primary goal is to enhance the returns of the capital we manage on behalf of our clients.”
Moving on to Manulife’s latest TCFD report, it outlines how Manulife IM incorporates climate-related risks and opportunities into investment decisions through appropriate governance, strategy, risk management, metrics, and targets. If we were to expand upon that, we would learn that almost 90% of the company’s global real estate equity portfolio has earned certification of a green building standard, such as LEED, ENERGY STAR, or BOMA BEST. Furthermore, we would get to know that Manulife has removed an estimated 1.5 million tons of CO2e from the atmosphere by its managed forests and farms on a five-year rolling average. Beyond that, the report reveals that the company now seeks to increase access to the number and variety of sustainable investing options available to its clients.
As for Manulife IM’s latest SRI report, it provides insight into the firm’s approach to sustainable investing, including its governance, stewardship information, its scorecard from the Principles for Responsible Investment (PRI), and other sustainability milestones and outcomes. You see, the report touched on how publication of the company’s inaugural nature report, aligned with the recommendations of Taskforce on Nature-related Financial Disclosures (TNFD), outlined its approach towards managing nature-related risks and opportunities across its timberland and agriculture businesses. Furthermore, it revealed that the company has achieved a GRESB 5 Star rating for the sixth consecutive year. Manulife has also formalized a sustainable investing strategy for its private equity and credit platform, which included both establishing near-term priorities and longer-term commitments.
