Manulife Investment Management Issues Inaugural Climate Report for Timber and Agriculture Investments

(Credit: Pixabay)

by | Dec 23, 2020

This article is included in these additional categories:

(Credit: Pixabay)

Hancock Natural Resource Group (HNRG), a Manulife Investment Management Company, recently released its inaugural climate disclosure report. The new report highlights the risks and opportunities climate change presents to timber and agriculture investments and how the firm is assessing and managing climate-related impacts. This focused report is structured following the recommendations of the Task Force on Climate-related Financial Disclosures.

“We believe the biggest climate-related opportunity within timber and agriculture is carbon removal,” said William E. Peressini, CEO, HNRG. HRNG says that, as longtime managers of timber and agriculture, it is aware of the impact climate change has on biological assets and is in a position to mitigate its effects.

The new report focuses on climate analysis and expands on what is contained in the Manulife Investment Management sustainable and responsible investing report for the timber and agriculture business. It provides a much deeper understanding of its approach to climate-related governance, strategy, risk management, and metrics and targets for these asset classes.

  • As a thematic investment manager, HNRG identifies areas where social or environmental objectives can offer commercial investment opportunities across timber and agricultural assets. Sustainably managed forests and farms are carbon sinks and are two of the most significant types of natural climate solutions for removing carbon dioxide from the atmosphere. Leveraging this function is a strategic priority for the firm and informs business planning across multiple time horizons. HNRG incorporates the anticipated impacts of climate-related risks and opportunities into its business strategy in five key ways: Economic research, Diversification, High-quality asset management, Value-added services, and Impact-first investments.
  • HNRG’s risk management process for identifying and assessing climate-related risks is grounded in its acquisition due diligence and integrated investment and property management businesses. HNRG conducts comprehensive environmental, biological and social reviews of all targets and requires all reviews to highlight variance from U.S. standards, even when the relevant local standards are less stringent. In addition to investment due diligence, risk is managed though portfolio diversification and property management by HNRG’s forest and farm management teams. HNRG also manages risk through implementation of a uniform set of Stewardship Principles which are developed, reviewed and adhered to on both a regional and global level.
  • The primary metric used by HNRG to measure the success of its climate-related efforts is clients’ risk-adjusted returns. HNRG believes risk-adjusted return provides the most comprehensive measure of success in managing client assets. HNRG also prioritizes and incentivizes climate stewardship. Stewardship performance comprises 20% of annual employee incentive plan compensation, and is based on third-party sustainability certification audits, as well as the integration of ESG considerations into acquisition due diligence.

Additional articles you will be interested in.

Stay Informed

Get E+E Leader Articles delivered via Newsletter right to your inbox!

This field is for validation purposes and should be left unchanged.
Share This