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Case Study: Mirae Asset Global Investments Investor Climate Action Plan
ICAPs Expectations Ladder Focus Area: Investments
Mirae Asset Global Investments (Mirae Asset) was founded in Asia and now operates worldwide across 12 markets, where it takes a collaborative approach in managing a fully diversified investment platform. Mirae Asset invests in multiple asset classes through exchange-traded funds (“ETF”), mutual funds and alternatives and currently invest over US$218bn on behalf of clients, giving it the scale and experience to identify opportunities in a changing world (AUM as of September 2021).
Decarbonisation of global economies is no longer old news; this low carbon trajectory needs to accelerate in order to keep global warming to 1.5C as re-emphasised at the latest COP26. The financial implications of climate change - those that arise from risks due to extreme climate events or stranded assets as well as those that arise from low carbon opportunities – need to be considered as part of investment decisions. Mirae Asset is a supporter of the Task Force for Climate-related Financial Disclosures (TCFD) and also participates in collaborative climate engagement through Climate Action 100+.
Investments
Mirae Asset integrates climate change into its traditional investment strategies through thematic investing, divestments and engagement. In its Position Statement on Climate Change, Mirae Asset set out its position on fossil fuel sectors and its investment policy to phase out exposure through divestment, best-in-class selection or engagement. For example, the firm-wide ESG Restrictive List for the traditional investment business explicitly commits to refrain from investing in thermal coal mining and unconventional oil & gas companies, using revenue thresholds to determine business exposure. For some parts of its portfolio, Mirae Asset also has in place decarbonisation strategies whereby it further excludes companies in thermal coal power generation, and conduct best-in-class selection for oil & gas companies to ensure companies’ decarbonisation commitment aligned to a 1.5C degree scenario.
Mirae Asset assesses climate-related risks as part of its risk management processes for traditional investment strategies. On a monthly basis, Mirae Asset monitors portfolio carbon footprints and targets emissions below the benchmark for portfolios. For some portfolios, it also conducts climate scenario analysis to stress test the impacts of physical and transition risks (image below). For example, Mirae Asset assess the portfolio’s climate value at risk due to physical risks such as floods, droughts, or storms, and provide the portfolio’s value at risk by sector to facilitate more informed investment decision making. By projecting potential future emissions from the portfolio’s exposure to fossil fuel, it also assesses the portfolio’s risks to stranded assets. Projections of renewables capacity for different climate scenarios are also key research inputs it leverages to inform future investment decisions. Mirae Asset is currently looking to roll scenario analysis out more broadly across portfolios and is yet to integrate climate change into strategic asset allocation.
Mirae Asset monitors the temperature alignment for some parts of its traditional investment portfolio and actively engage with investee companies to set 1.5C-aligned targets. For its own operations, Mirae Asset has set decarbonisation targets on its indirect GHG emissions; it aims to reduce its electricity and paper usage by 20% by 2024, compared to 2021. Mirae Asset also has targets for ESG products to take up 15% of all product offerings and 25% of total AUM by 20241. It is actively exploring the feasibility and possibility of setting net-zero aligned targets for our investments in the future.
Mirae Asset is working towards undertaking Tier 2 actions within the ICAPs ladder.
Staying Ahead with Mirae Asset’s Latest Insights
Disclaimer & Information for Investors
No distribution, solicitation or advice: This document is provided for information and illustrative purposes and is intended for your use only. It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated service.
The views and information discussed or referred in this document are as of the date of publication. Certain of the statements contained in this document are statements of future expectations and other forward-looking statements. Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be accurate. Actual results, performance or events may differ materially from those in such statements. In addition, the opinions expressed may differ from those of other Mirae Asset Global Investments’ investment professionals.
Investment involves risk: Past performance is not indicative of future performance. It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost. It may not be suitable for persons unfamiliar with the underlying securities or who are unwilling or unable to bear the risk of loss and ownership of such investment. Before making any investment decision, investors should read the Prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Fund and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investment.
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Information for EU investors pursuant to Regulation (EU) 2019/1156: This document is a marketing communication and is intended for Professional Investors only. A Prospectus is available for the Mirae Asset Global Discovery Fund (the “Company”) a société d'investissement à capital variable (SICAV) domiciled in Luxembourg structured as an umbrella with a number of sub-funds. Key Investor Information Documents (“KIIDs”) are available for each share class of each of the sub-funds of the Company.
The Company’s Prospectus and the KIIDs can be obtained from www.am.miraeasset.eu/fund-literature . The Prospectus is available in English, French, German, and Danish, while the KIIDs are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the “UCITS Directive”). Please refer to the Prospectus and the KIID before making any final investment decisions.
A summary of investor rights is available in English from www.am.miraeasset.eu/investor-rights-summary.
The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. FundRock Management Company can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.
Hong Kong: This document is intended for Hong Kong investors. Before making any investment decision to invest in the Fund, Investors should read the Fund’s Prospectus and the information for Hong Kong investors (of applicable) of the Fund for details and the risk factors. The individual and Mirae Asset Global Investments (Hong Kong) Limited may hold the individual securities mentioned. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
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