The Wellcome has pledged to make its investment portfolio carbon neutral by 2050.
The charity, which holds a portfolio worth £29bn, said that it will be engaging with both asset managers and directly with the companies in which it invests, to encourage companies to move away from operations which harm the environment.
This would allow the charity to realise “real world changes” through its investments, Wellcome said.
Engaging not divesting
To achieve net zero across the portfolio, the companies in which the charity is invested will need to balance greenhouse gas emissions with greenhouse gas removed from the atmosphere.
In a strategy published alongside the pledge, the Wellcome said that around a third of its investments by value are currently in companies which have declared their own carbon neutrality target.
The strategy also said that the charity's public equity holdings have “relatively little exposure to the most carbon-intensive businesses”, and that it will analyse and publish its progress towards net-zero investment every year.
The charity does not plan to divest from carbon-intensive industries, but lists divestment as one potential “consequence” if companies do not take steps to improve their environmental impact.
Growth
The Wellcome's investment portfolio grew in value by £2bn in 2019-20, to just under £30bn.
Over the same period, the Wellcome spent £1bn on scientific research, including work to address the global impact of Covid-19.
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Nick Moakes, the chief investments officer at the Wellcome, said: “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.”
Julia Gillard, the chair of Wellcome, said: “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.”
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