cambridge associates client spotlight
national trust
MEET THE
NATIONAL TRUST
0.1
0.2
connecting mission and investments
Climate change is the single biggest threat to the precious landscapes and historic houses the Trust cares for. In addition to trying to mitigate its many effects, the Trust has joined the global mission to fight against it.
They’ve made the ambitious pledge to reach net-zero carbon emissions across their operations by 2030, two decades ahead of the goal set by the Paris Agreement. The Trust’s efforts began in 2013, when they set out to generate 50% of their own energy from renewable sources – a target they recently met. In 2020, they also announced a plan to plant 20 million trees in ten years to help offset the carbon they emit. Putting that into perspective, 20 million trees is the equivalent of more than 17,000 hectares of woodland – another 7% of the Trust’s land on top of the 10% already wooded. They’ve dedicated their resources, at every level of the organization, to tackle the climate crisis from all angles as they move from theory to implementation.
For the Trust, reaching net-zero emissions had to go beyond their operations and also include their investment portfolio. They decided to put their £1 billion plus investment portfolio to work as well, by divesting from fossil fuels, investing for positive climate outcomes, actively engaging with their investment managers, and by influencing other investors and the broader finance community to do the same.
0.3
HOW THE NATIONAL TRUST IS USINg a THREE-PRONGED STRATEGY TO CREATE POSITIVE IMPACT
Building off momentum from a pre-existing partnership, Cambridge Associates (CA) was selected to advise the Trust’s total portfolio in 2019. Later that year, the National Trust’s investment committee, in partnership with CA, conducted stakeholder interviews to create a common strategic baseline of both objectives and ambitions. They followed up with a comprehensive carbon audit of the investments within their portfolio to identify any that were counter to their mission and to inform their strategy for fossil fuel divestment. The result of that audit led to portfolio changes that included the termination of some investment managers.
0.1
0.2
Meet the National Trust (the Trust), the United Kingdom’s biggest conservation charity and largest private land owner.
Founded on the belief that nature, beauty, and history are for everyone to enjoy forever, the Trust has worked tirelessly
for more than 125 years to protect wildlife habitats and historical sites for the benefit of its 5.7 million current members as well as future generations. Today, the Trust operates in England, Wales, and Northern Ireland, protecting and maintaining 620,000 acres of land and 780 miles of coastline. With more than 500 historic houses, castles, archaeological and industrial monuments, gardens, parks, and nature reserves, the Trust hosts more than 22 million visitors annually.
National Trust has pledged to reach
net-zero carbon
emissions by 2030, two
decades ahead of the
Paris Agreement.
lessons learned
0.4
OPTIMIZE GOVERNANCE
ESTABLISH CLEAR STRATEGY
0.1 Meet the National Trust
0.2 connecting Mission And Investments
0.3 Three-pronged Strategy to create a positive impact
0.4 Lessons Learned
NAVIGATE TO:
0.5 Download the PDF Version
View more Client Spotlights
Back to the top
This profile does not constitute an endorsement of Cambridge Associates by the National Trust.
Copyright © 2024 Cambridge Associates LLC. All Rights Reserved.
National Trust has pledged
to reach net-zero carbon
emissions by 2030, two
decades ahead of the
Paris Agreement.
USE INFLUENCE FOR GOOD
The Trust continues to use their world-renowned reputation to influence the broader finance ecosystem and motivate others to work towards decarbonizing the economy. As part of this effort and at the recommendation of CA, the Trust joined the Institutional Investors Group on Climate Change (IIGCC), a group of more than 400 asset owners and managers in Europe that collaborates on matters of climate change. Using the framework developed by IIGCC, CA assists the Trust in reporting their strategy and progress to the broader community of investors to share what they’ve learned. Additionally, the Trust has become more engaged with the managers they are invested with to encourage them to adopt similar climate targets and strategies. The goal is to effect change as far and wide as possible – well beyond the Trust and its portfolio. And they won’t stop when they achieve net-zero emissions—the Trust has set their sights on being carbon-negative.
LESSONS LEARNED
MEASURE AND ADAPT
FIND COMMON GROUND
The Trust spent time to establish shared beliefs among the Investment Committee, the Board, and National Trust management, an effort that proved successful because of the strong commitment from all levels of the organisation. These beliefs became the principles upon which they would invest moving forward, and included a commitment to invest with managers that are aligned with the mission of the Trust. Part of this process also involved ensuring that the Board and the Investment Committee had the education and tools they needed to understand the extent to which environmental matters impact the business objectives of the Trust. Board and Investment Committee Members were invited to tour some of the Trust’s sites that are particularly vulnerable to the effects of climate change. These excursions helped to create a sense of urgency and made the climate crisis more tangible for Board and Investment Committee members so that they were aligned with the need for the Trust’s ambitious impact investing goals. The Trust also made a commitment to bring on new board members with specific expertise related to environmental issues, climate tech, and impact investing more generally.
The Trust designed their governance
structure to best support their net-zero goals. Their structure allowed them to optimise their partnership with CA to advise them on their total portfolio and climate strategy, while still maintaining final decision making. For private investments, the Trust leaned on CA’s expertise and operational capabilities to handle day-to-day decision making, manager selection, and back-office administration. This structure allowed the Trust to focus on their net-zero strategy from the optimal altitude and delegate certain management functions. In 2020, under the guidance of CA, the committee created a Stewardship &Engagement Working Group (SWEG) dedicated to actively engaging with their asset managers and monitoring their contribution to the Trust’s net-zero strategy. In 2021, they added the Manager Selection & Monitoring Working Group (MSMWG) to work in partnership with CA on selecting and monitoring managers. The two working groups collaborate closely so the Trust’s dual objectives of return and net zero can be achieved.
The Trust measured their carbon footprint and net-zero alignment at the start of their net-zero journey to understand their baseline, and continues to regularly track their progress and adapt as needed. The economics of climate change are evolving rapidly, and the Trust recognizes the importance of adapting to changing circumstances, while still relying on the underlying strategy to guide the process. For example, they quickly realised that to drive change in the real world their main goal should be to ‘finance reduced emissions’ rather than to ‘reduce financed emissions’ – a mainly presentational benefit. The framework they created had to account for the various nuances that existed within their portfolio. While they set clear guidelines and parameters within their strategy, they also incorporated a certain amount of flexibility for any exceptions that arose. They monitor their progress on an ongoing basis and can quickly identify areas for improvement or particular focus.
Moving from theory to implementation was no easy task for the Trust, especially as they have to reach net-zero emissions by 2030 for their portfolio as well as its operations; that’s 20 years ahead of the Paris Agreement’s 2050 target for the global economy. The Trust had to clearly define their strategy, which involved four pillars: the first was divesting from high-emitting companies, especially fossil fuels, and the second was scaling up their investments in climate solutions. The third was to ensure the Trust and their investment managers used their voice and proxy voting power as shareholders to encourage and motivate more portfolio companies to adopt credible and Paris-aligned net-zero targets. Finally, the fourth pillar recognised that it would be impossible for a fully diversified portfolio to have zero emissions by 2030 and it would be necessary to identify carbon-negative investments, like the reforestation strategy, which also matched the Trust’s nature and biodiversity standards. They realised early on that decisions were not always straight forward. For example, they found themselves invested in a wind turbine manufacturer which increased direct portfolio emissions, though the final product would enable proportionally much more decarbonization elsewhere.
ESTABLISH CLEAR STRATEGY
OPTIMIZE GOVERNANCE
View more Client Spotlights
0.5 Download the PDF Version
The National Trust seeks to increase
their investments in companies with
business plans aligned with a low-carbon future and to reduce exposure to companies and industries that don’t meet this criteria. This involves tilting away from companies with high emissions that lack adequate plans to reduce them (these companies represent the highest transition risk). It also means divesting from the owners of fossil fuel reserves, who are vulnerable as the economy decarbonises.
The National Trust collaborates to
demonstrate the leadership behaviours that the financial system needs to adopt to address the climate crisis. The Trust will engage with companies to encourage changing behaviours which reduce emissions, and also engage with their investment managers to encourage them to do the same. They will also work with their managers to develop new investment products that meet their environmentally focused requirements.
The National Trust invests selectively in innovative companies that seek to have positive environmental impacts, with the goal of speeding up the transition to a low carbon economy.
This profile does not constitute an endorsement of Cambridge Associates by the National Trust.
Copyright © 2024 Cambridge Associates LLC. All Rights Reserved.
FIVE LESSONS NATIONAL TRUST HAS LEARNED ON THEIR JOURNEY TO NET ZERO
In early 2020, the board approved an adjusted asset allocation to allow for the portfolio to focus on asset classes where they would trade some liquidity within the portfolio to better target investments that offered the potential for decarbonisation. As part of that effort, the investment committee developed an ESG and decarbonisation framework to help evaluate managers that would best align with their mission. Note that the climate strategy efforts apply to all asset classes, not just private equity.
In May 2021, the investment committee, with support from CA, defined their methodology for reaching net zero
within their portfolio by 2030. In so doing, they also chose to go public with their goal for two reasons: to put themselves
‘on the hook’ for reaching their objective, and to encourage other organisations to follow suit. The investment
committee was very specific within their Investment Policy Statement, outlining their role as a patient long-term
investor who is both diversified and with a focus on sustainability whilst still achieving stated long-term return
objectives. Part of that effort included hosting an event at CA’s offices where they connected asset managers with the Trust’s experts in an effort to make National Trust’s mission very real to their financial partners.
While the Trust takes care to avoid destructive investments, they wanted their investment strategy to be a positive force by investing intentionally across a range of solutions to decarbonise the economy and combat the climate crisis. These range from what the Trust calls ‘moon shot’ bets within the climate tech space to fund innovations, like carbon-free cement or fusion energy, to renewable infrastructure like wind or solar power and green hydrogen. The last piece of their strategy involved investing in carbon sinks. One example of carbon sinks are innovative investments in the reforestation of degraded farmland in South America, restoring biodiversity whilst removing carbon from the atmosphere to offset residual emissions attributable to the investment portfolio by 2030. Since 2020, the Trust has reduced the portfolio’s carbon footprint by 60%, showing significant progress toward their net-zero goal.
With their net-zero strategy well underway, the Trust has remained steadfast in their commitment to clearly define and communicate their plan as well as to monitor their progress. This includes considering all sources of carbon
emissions and the carbon sinks within the portfolio and then adjusting their approach if further action is needed in a particular area.
One important aspect of their strategy has been to adopt an approach that analyses multiple data sets at once, giving them the ability to gain a full picture of their current climate impact. This means not just carbon emissions – a backward looking measure – but also the extent to which portfolio holdings have science-based targets (SBTs) and therefore are on a path consistent with net zero. This enables the Trust to focus their active engagement effort on areas where their impact can be maximised and to adapt quickly to changing circumstances. In 2022, the Trust published their third detailed Carbon & Climate Report, which shares important insights and updates on their net-zero progress.
The Trust designed their governance structure to best support their net-zero goals. Their structure allowed them to optimise their partnership with CA to advise them on their total portfolio and climate strategy, while still maintaining final decision making. For private investments, the Trust leaned on CA’s expertise and operational capabilities to handle day-to-day decision making, manager selection, and back-office administration. This structure allowed the Trust to focus on their net-zero strategy from the optimal altitude and delegate certain management functions. In 2020, under the guidance of CA, the committee created a Stewardship & Engagement Working Group (SWEG) dedicated to actively engaging with their asset managers and monitoring their contribution to the Trust’s net-zero strategy. In 2021, they added the Manager Selection & Monitoring Working Group (MSMWG) to work in partnership with CA on selecting and monitoring managers. The two working groups collaborate closely so the Trust’s dual objectives of return and net zero can be achieved.
Moving from theory to implementation was no easy task for the Trust, especially as they have to reach net-zero emissions by 2030 for their portfolio as well as its operations; that’s 20 years ahead of the Paris Agreement’s 2050 target for the global economy. The Trust had to clearly define their strategy, which involved four pillars: the first was divesting from high-emitting companies, especially fossil fuels, and the second was scaling up their investments in climate solutions. The third was to ensure the Trust and their investment managers used their voice and proxy voting power as shareholders to encourage and motivate more portfolio companies to adopt credible and Paris-aligned net-zero targets. Finally, the fourth pillar recognised that it would be impossible for a fully diversified portfolio to have zero emissions by 2030 and it would be necessary to identify carbon-negative investments, like the reforestation strategy, which also matched the Trust’s nature and biodiversity standards. They realised early on that decisions were not always straight forward. For example, they found themselves invested in a wind turbine manufacturer which increased direct portfolio emissions, though the final product would enable proportionally much more decarbonization elsewhere.
The Trust measured their carbon footprint and net-zero alignment at the start of their net-zero journey to understand their baseline, and continues to regularly track their progress and adapt as needed. The economics of climate change are evolving rapidly, and the Trust recognizes the importance of adapting to changing circumstances, while still relying on the underlying strategy to guide the process. For example, they quickly realised that to drive change in the real world their main goal should be to ‘finance reduced emissions’ rather than to ‘reduce financed emissions’ – a mainly presentational benefit. The framework they created had to account for the various nuances that existed within their portfolio. While they set clear guidelines and parameters within their strategy, they also incorporated a certain amount of flexibility for any exceptions that arose. They monitor their progress on an ongoing basis and can quickly identify areas for improvement or particular focus.
The Trust continues to use their world-renowned reputation to influence the broader finance ecosystem and motivate others to work towards decarbonizing the economy. As part of this effort and at the recommendation of CA, the Trust joined the Institutional Investors Group on Climate Change (IIGCC), a group of more than 400 asset owners and managers in Europe that collaborates on matters of climate change. Using the framework developed by IIGCC, CA assists the Trust in reporting their strategy and progress to the broader community of investors to share what they’ve learned. Additionally, the Trust has become more engaged with the managers they are invested with to encourage them to adopt similar climate targets and strategies. The goal is to effect change as far and wide as possible – well beyond the Trust and its portfolio. And they won’t stop when they achieve net-zero emissions—the Trust has set their sights on being carbon-negative.
The Trust’s Net-Zero Strategy for its investment portfolio is aimed at driving positive change in the real world, reflecting their values and optimising return outcomes. Acknowledging there is no single solution, their strategy has three components:
The National Trust seeks to increase
their investments in companies with
business plans aligned with a low-carbon future and to reduce exposure to companies and industries that don’t meet this criteria. This involves tilting away from companies with high emissions that lack adequate plans to reduce them (these companies represent the highest transition risk). It also means divesting from the owners of fossil fuel reserves, who are vulnerable as the economy decarbonises.
The National Trust collaborates to
demonstrate the leadership behaviours that the financial system needs to adopt to address the climate crisis. The Trust will engage with companies to encourage changing behaviours which reduce emissions, and also engage with their investment managers to encourage them to do the same. They will also work with their managers to develop new investment products that meet their environmentally focused requirements.
The National Trust invests selectively in innovative companies that seek to have positive environmental impacts, with the goal of speeding up the transition to a low carbon economy.
Building off momentum from a pre-existing partnership, Cambridge Associates (CA) was selected to advise the Trust’s total portfolio in 2019. Later that year, the National Trust’s investment committee, in partnership with CA, conducted stakeholder interviews to create a common strategic baseline of both objectives and ambitions. They followed up with a comprehensive carbon audit of the investments within their portfolio to identify any that were counter to their mission and to inform their strategy for fossil fuel divestment. The result of that audit led to portfolio changes that included the termination of some investment managers.
In early 2020, the board approved an adjusted asset allocation to allow for the portfolio to focus on asset classes where they would trade some liquidity within the portfolio to better target investments that offered the potential for decarbonisation. As part of that effort, the investment committee developed an ESG and decarbonisation framework to help evaluate managers that would best align with their mission. Note that the climate strategy efforts apply to all asset classes, not just private equity.
In May 2021, the investment committee, with support from CA, defined their methodology for reaching net zero within their portfolio by 2030. In so doing, they also chose to go public with their goal for two reasons: to put themselves ‘on the hook’ for reaching their objective, and to encourage other organisations to follow suit. The investment committee was very specific within their Investment Policy Statement, outlining their role as a patient long-term investor who is both diversified and with a focus on sustainability whilst still achieving stated long-term return objectives. Part of that effort included hosting an event at CA’s offices where they connected asset managers with the Trust’s experts in an effort to make National Trust’s mission very real to their financial partners.
While the Trust takes care to avoid destructive investments, they wanted their investment strategy to be a positive force by investing intentionally across a range of solutions to decarbonise the economy and combat the climate crisis. These range from what the Trust calls ‘moon shot’ bets within the climate tech space to fund innovations, like carbon-free cement or fusion energy, to renewable infrastructure like wind or solar power and green hydrogen. The last piece of their strategy involved investing in carbon sinks. One example of carbon sinks are innovative investments in the reforestation of degraded farmland in South America, restoring biodiversity whilst removing carbon from the atmosphere to offset residual emissions attributable to the investment portfolio by 2030. Since 2020, the Trust has reduced the portfolio’s carbon footprint by 60%, showing significant progress toward their net-zero goal.
With their net-zero strategy well underway, the Trust has remained steadfast in their commitment to clearly define and communicate their plan as well as to monitor their progress. This includes considering all sources of carbon emissions and the carbon sinks within the portfolio and then adjusting their approach if further action is needed in a particular area.
One important aspect of their strategy has been to adopt an approach that analyses multiple data sets at once, giving them the ability to gain a full picture of their current climate impact. This means not just carbon emissions – a backward looking measure – but also the extent to which portfolio holdings have science-based targets (SBTs) and therefore are on a path consistent with net zero. This enables the Trust to focus their active engagement effort on areas where their impact can be maximised and to adapt quickly to changing circumstances. In 2022, the Trust published their third detailed Carbon & Climate Report, which shares important insights and updates on their net-zero progress.
The Trust’s Net-Zero Strategy for its investment portfolio is aimed at driving positive change in the real world, reflecting their values and optimising return outcomes. Acknowledging there is no single solution, their strategy has three components:
Set in a beautiful wooded estate, Lanhydrock is an unembellished country house surrounded by acres of stunning gardens.
Fenton House in Hampstead is a treasured London 17th century house that contains the porcelain collection of its last owner, Lady Binning, as well as the Benton Fletcher collection of early musical instruments.
A glorious slice of Purbeck coastline with three miles of gently shelving sandy beaches, Old Harry Rock stacks and heathland.
The Horsey Broadland in Norfolk offers a walk to the beach and back, following grassy paths and tracks, encompassing low-lying grazing marshes, sand dunes, and a narrow sandy beach, with the chance of seeing grey seals.
Stowe Landscape Garden in Buckinghamshire was the creation of the Temple family, Stowe has been described as “a work to wonder at” in its size, splendour and variety.
Set in a beautiful wooded estate, Lanhydrock is an unembellished country house surrounded by acres of stunning gardens.
Fenton House in Hampstead is a treasured London 17th century house that contains the porcelain collection of its last owner, Lady Binning, as well as the Benton Fletcher collection of early musical instruments.
A glorious slice of Purbeck coastline with three miles of gently shelving sandy beaches, Old Harry Rock stacks and heathland.
The Horsey Broadland in Norfolk offers a walk to the beach and back, following grassy paths and tracks, encompassing low-lying grazing marshes, sand dunes, and a narrow sandy beach, with the chance of seeing grey seals.
Stowe Landscape Garden in Buckinghamshire was the creation of the Temple
family, Stowe has been described as “a work to wonder at” in its size, splendour and
variety.
FIVE LESSONS NATIONAL TRUST HAS LEARNED
ON THEIR JOURNEY TO NET ZERO