Manulife Investment Management issues inaugural Climate Report for timber and agriculture aligned with recommendations from the Task Force on Climate-related Financial Disclosures
Identifies carbon removal investments as 2021 priority
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BOSTON, Dec. 22, 2020 /CNW/ - 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. "Traditionally we have managed timberland and farmland for our investors in order to achieve market-rate returns, while also generating positive environmental and social outcomes. We are now scaling up our capabilities for "impact-first investments" - investments that optimize and prioritize carbon sequestration - which may also provide the best climate change mitigation option for clients."
As longtime managers of timber and agriculture, HNRG 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.
"The HNRG 2020 Climate Report showcases why it is a business imperative to adapt to and address climate-related impacts," added Brian J. Kernohan, Head of Sustainability, Private Markets, Manulife Investment Management and Hancock Natural Resource Group. "We look forward to continuing the work necessary to obtain or develop information tailored to achieve fuller results in future iterations of climate-related scenario analysis on behalf of our clients to better understand the journey ahead to a lower carbon and more sustainable world."
Please click here to download a copy of the 2020 Climate Report.
About Hancock Natural Resource Group
Hancock Natural Resource Group (HNRG) is part of Manulife Investment Management's comprehensive Private Markets platform, which includes Private Equity and Credit, Infrastructure, Real Estate, Timber and Agriculture. HNRG's timber division manages approximately 5.4 million acres of timberland across the United States and in Canada, New Zealand, Australia, and Chile. HNRG's agricultural investment group oversees approximately 470,000 acres of prime farmland in major agricultural regions of the United States and in Canada and Australia.
About Manulife Investment Management
Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 17 countries and territories. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We're committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement.
As of September 30, 2020, Manulife Investment Management had CAD$923 billion (US$692 billion) in assets under management and administration. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.
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