The goal of this project is to encourage our portfolio companies to set science-based emissions targets, aligned with the Science Based Targets initiative (SBTi).

When governments worldwide signed the Paris Climate Agreement in 2015, they committed to limiting global warming to well below 2°C and preferably 1.5°C, compared to pre-industrial levels. According to the latest climate science, the highest level of ambition is needed to limit global temperature rise to 1.5°C to mitigate negative impacts such as extreme weather events, sea-level rise, food shortages and biodiversity loss.  

Source: Science Based Targets Initiative Annual Progress Report 2020

Science-based targets

To achieve this goal, we engage with our portfolio companies and require them to set science-based emissions targets across all relevant scopes in line with the 1.5°C trajectory, as set out by the Science Based Targets initiative (SBTi):

Emissions target criteria

  • Level of ambition consistent with 1.5°C scenario
  • More than 95% of company emissions are covered
  • Timeframe 5-15 years in the future
  • Value chain target when value chain emissions are more than 40% of total emissions

As public target setting has proven to be a catalyst for action, the targets should always be supported by an effective transition plan to achieve them and by annual public disclosure on progress.

It's unlikely that companies will set science-based targets solely as a result of our efforts, so we will continue our engagement and monitor their progress on climate change targets.


To track the progress on the main objective of our engagement efforts, we have set five milestones.

  1. Company doesn’t have emission reduction targets
  2. Company has emission reduction targets, but these are not science-based
  3. Company is committed to setting science-based targets
  4. Company has set 2°C science-based targets
  5. Company has set 1.5°C science-based targets

Our ambition is to have all our portfolio companies reach milestone 5.


As an active shareholder, we continuously monitor the companies we are invested in and aim to maximise positive impact by having constructive dialogues with them. Focusing our efforts to meet the main objective, we use two different approaches. The first approach is to focus on companies that are lagging in their climate change programme and are at milestone 1 and 2. These companies can greatly improve their strategy either by setting targets or committing to setting science-based targets. In the second approach, we also focus on the high emitters in the portfolio, as limiting emissions for this group can have a substantial effect on total emissions reduction. We identified the five biggest direct emitters per fund and prioritised them for engagement.

Analysts reached out to a total of 35 companies to engage with them on climate change targets and strategies. Of the 35 companies approached, 71% responded positively to requests for engagement. In 2020, we engaged with a total of 21 companies to set science-based targets. A handful of company calls that could not be scheduled this year are already scheduled for 2021.

Engagement highlights 2020

  • In December, we engaged with German science and technology company Merck about not achieving its emissions reduction target of 20% set in 2006. The company attributed not reaching its targets to the acquisition of chemical manufacturing company Versum and highlighted process improvements and new technologies to curb future emissions. Merck expressed the ambition to set science-based targets in the future, which we will monitor.
  • In October, we questioned German pharmaceutical and healthcare packaging manufacturer Gerresheimer on its reduction targets, which did not include absolute emissions reduction. The company admitted that previous targets were not in line with the company’s ambition level and that a new target would be set. Gerresheimer seeks to reduce future emissions by switching to new melting technologies, replacing furnaces and using recycled glass. In December, the company published 50% reduction targets for 2030, in line with the Paris Climate Agreement.
  • In December, we spoke with the sustainability team at French automotive supplier Valeo. The company had company-wide reduction targets, but these were not science-based and not supported by a comprehensive emissions reduction programme. During our conversation, the company committed to the publication of 1.5°C targets for direct emissions and 2°C targets for value chains. Also, the company presented its carbon reduction programme to be rolled out the next year and asked for our input on its TCFD disclosures. In January 2021, Valeo signed the 1.5°C SBTi Business Ambition.

Progress baseline

We initiated the climate change engagement project in July 2020, which serves as the baseline for progress measurement. At the start, 10% of our portfolio companies had set 1.5°C science-based targets, 17% had set 2°C science-based targets and 16% had publicly committed to setting science-based targets. The remaining 57% are targeted for engagement to set science-based targets. While it is unlikely that companies will set science-based targets solely as a result of our efforts, we will continue our engagement and monitor progress of our portfolio companies on climate change targets and strategies over the course of 2021.


In November 2021, Triodos Bank made a public ambitious commitment to reach net zero by 2035 in line with a 1.5 degrees pathway by using a science-based targets approach. Currently, this ambition is being translated into more granular targets per investment fund and consequently implementation of targets is scheduled for mid-2022. One of the key levers in achieving carbon reduction, is the continuation of climate change engagement with investee companies.


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