Our progress on climate change
Climate change will increasingly affect us, wherever we are in the world, whatever our standing. As evidenced in a report by Oxford University in partnership with Pictet, climate change is arguably the defining issue of our time.
Our commitments and convictions
For Pictet, climate change represents both an urgent challenge and an opportunity to build a more sustainable economy. We believe it will have a material impact on asset prices and investment returns in the coming years. This is why our investment teams have articulated a common investment philosophy on climate and developed a set of actionable Climate Investment Principles, underpinned by robust research and months of iteration across investment teams. The resulting convictions are:
Climate change will have a material impact on asset prices and investment returns.
The investment decisions taken today will have a strong bearing on how climate change and its consequences ultimately unfold.
No economic system will be immune to the impacts of severe climate change, therefore such a risk cannot be easily diversified or hedged.
Our governance and risk management systems must be fit to enable the delivery of this climate action plan.
It is therefore our fiduciary responsibility to play an active role in accelerating the global economy’s transition towards a net-zero emissions future, in line with climate science. This means leveraging all tools at our disposal to effect positive change, including our own assets and operations, how we manage our clients’ assets and use our influence.
As a privately-held firm, we have the strength of independence and a governance that holds us accountable to the next generation. While this unique structure does not require the same level of reporting as publicly listed firms, we are especially committed to transparency when it comes to climate and other environmental factors. Transparency will be key to solving the climate challenge.
As investors, we depend on the transparency of the issuers in which we invest to obtain the data we need and to understand their transition pathways. Material environmental and social disclosures help us make better capital allocation decisions, and ultimately contribute to the transition. This is why we have committed to the initiatives and standards below.
To ensure a science-based approach to target setting, Pictet also supports the Business Ambition for 1.5 degrees from the Science-Based Targets Initiative (SBTi).
Task Force for Climate Related Financial Disclosures (TCFD)
We have endorsed the Task Force for Climate Related Financial Disclosures (TCFD) in order to strengthen our governance, strategy and risk management; measure climate-related risks; and assess green-investment opportunities. We will publish our first TCFD report in 2023 and progressively incorporate material TCFD-aligned disclosures in our annual reporting.
While initially we have focused mostly on climate-change mitigation, we have also started the interlinked work needed on climate adaptation and other environmental topics like biodiversity.
Our levers of climate action
In 2020, we outlined our Responsible Firm ambitions to 2025. This helped us identify key levers of action for conducting our own activities and for managing assets on behalf of our clients. These levers can also be activated in the context of climate action, read more about our progress so far:
Managing clients’ assets
Responsible products and solutions
Research and thought leadership
Managing our own assets
Investing our balance sheet
Managing our direct environmental impact
Advocacy and partnerships
The way forward
We do not aspire to be the leader of the financial services sector when it comes to climate, because for us all to win, there can be no losers.
It is in our collective best interest that we all take first place in this race. For our clients, we compete against our peers on our services and offering; for the planet we are committed to collaborating with our peers, as well as industry bodies, policy makers and other organisations.
There is no silver bullet to address climate change. It will require ingenuity, imagination, courage and long-term focus – the same qualities that humans have deployed in the battle against Covid-19. It will also require pursuing a shared collective ambition of limiting warming to 1.5˚C, deliberate planning, shifting capital and increased transparency throughout the system.
Mitigating the risks of climate change, while identifying and pursuing the inherent opportunities for our clients, are not only key strategic priorities for us, but also our fiduciary duty. The Pictet Group has survived and prospered for over two centuries by taking a responsible, long-term approach to business and to the management of our clients’ wealth. In doing so, we have always considered not only the interests of the present, but also of future generations.