Responsible Investment Report 2022

71

Climate change

Introduction

Active ownership

ESG integration

Partnership with Prudential

Community and people

A final word

Improving climate reporting capabilities for Eastspring Investment portfolio carbon footprint: Eastspring has the capability to measure and report the carbon footprint of the funds we manage. The intensity measure was selected to account for various asset classes. In 2021, Eastspring first began to measure and report the carbon footprint of our strategies as a provided capability to our largest client, Prudential Group, that had announced its decarbonisation targets for its investment portfolio and had required internal and external reporting. Prudential Group disclosed the WACI of its investment portfolio for the first time in its 2021 ESG Report. Operational carbon footprint: Whilst current focus has been placed on investment targets, Eastspring plans to look into operational emissions and consider targets in the year ahead as part of the Purpose Workstream.

WACI & Exposures Dashboard

Engagement Dashboard

CVaR Dashboard

This dashboard is used to monitor the WACI and exclusion exposures of Prudential investment portfolio. This is referred to when putting together the monthly deck for reporting. The original build of this dashboard was completed at the end of 2021 and enhancements were added in 2022. The dashboard has been expanded from the funds we manage for Prudential to Eastspring Singapore funds. At this stage, data is refreshed quarterly for internal reference.

This dashboard is used to consolidate all engagement activity across Eastspring. This also allows us to quickly aggregate and quicky view a breakdown of all our engagement statistics. Enhancements, such as a world heat map of engagement activity and a milestone tracker, have been added. For more information on engagement, please refer to page 16.

The dashboard is used to view the CVaR and ITR of the investment portfolio and underlying funds. It has the capacity for switching between the three scenarios and providing comparisons. As we continue to work towards streamlining data, we pivoted focus internally to pull together the original build of this dashboard in 2022.

Enhancing our data capabilities for strategic projects

Eastspring also recognises the challenges that arise with incomplete data. As a data user, we are at the end of the data value chain, using data disclosed by investees through reporting frameworks such as the TCFD recommendations and CDP. As discussed in the Financial Stability Board’s 2022 TCFD status report, which describes the global state of alignment of companies’ reporting with the TCFD recommendations, the TCFD-aligned reporting by region is notably lower across Asia and Africa, which are key markets that Eastspring and Prudential operate in. Data availability therefore remains an ongoing challenge, as is reflected in the coverage level of the WACI and financed emissions for our

investment portfolio shown in this section. We continue to work with data providers to improve the availability of data. An increase in data coverage may have the impact of either raising or lowering the WACI of our investment portfolio if the profile of the new companies’ data is different to those already included in the current coverage. We expect such limitations to be overcome as more climate disclosures occur in these regions, potentially using established frameworks such as the TCFD or the anticipated standards from the International Sustainability Standards Board (“ISSB”).

Eastspring is consolidating current reporting efforts and enhancing our capabilities for responding to regulatory changes, changes in data availability, and bringing our edge in Asian markets into focus. In conjunction with the harmonised Group RI Policy, we have built internal dashboards as a means of supporting the streamlining of our RI approach.

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