Baillie Gifford: our NZAMi commitments

November 2022

Key Points

  • Baillie Gifford announces its first set of Net Zero Asset Managers initiative targets and portfolio commitments
  • They focus on the increasing alignment of companies with net zero goals over time
  • These targets and commitments are embedded in our fundamental approach to research and engagement

All investment strategies have the potential for profit and loss. Your or your clients’ capital may be at risk.

A year ago, in the run-up to COP26, Baillie Gifford joined the Net Zero Asset Managers initiative. As COP27 opens in Egypt, NZAMi is publishing our first set of climate-related commitments. We have taken care to ensure the portfolio-level targets align with our clients’ investment objectives.

We consider a wide range of factors that can impact long-term investment performance. As part of this, we believe that competitive advantage will accrue to the climate-prepared. Companies readying themselves for the challenge will do so in different ways. We hope to make a positive impact by selectively backing both innovative solutions providers and long-standing business models that can adapt and thrive.

There is growth of every type – expansionary, disruptive and replacement1 – in the climate transition. Finding the winners over our preferred five-year-plus time horizon requires us to be imaginative but not deterministic. It requires us to work in the multiple dimensions of technology, geography, policy and evolving social values.

Our focus on active, relatively concentrated portfolios lets us apply our detailed research and engagement process to the complexities ahead.

It looks very premature to suggest the world is on track to limit warming this century to 1.5C over pre-industrial levels. Many of the required technologies are visible, but the countervailing forces of system inertia and the simple lack of time are hard realities.

COP26 inched forward, and we should expect COP27 to be another evolutionary rather than revolutionary advance as it struggles with the politics of global equity.

But on any long view, the direction of travel is clear:

  • Expectations for the business-as-usual temperature rise in 2100 have fallen by almost 1C since 2016, albeit to a still way too hot 2.8C increase
  • Massive drops in technology costs across power, batteries, electric vehicles and efficiency-enabling digitisation are bringing forward the tipping points for their mass adoption
  • The US’s Inflation Reduction Act and the EU’s RePower deals have followed China’s efforts to provide direct economic support, and thus accelerated business opportunity, for green substitutes


Russia’s invasion of Ukraine has created near-term chaos in energy markets. But it has also highlighted the fragility of being fossil fuel dependent. That is likely to accelerate the adoption of renewable energies, as well as redouble India and China’s efforts to reject a gas-based transition. The shift to low carbon is underway – only the pace of change is uncertain.

The achievements of the last decade are simultaneously insufficient and tremendous. As climate damage and climate mitigation continue to accelerate through the 2020s, at Baillie Gifford we will continue to factor climate considerations into our investment approach. Over our stated investment time horizon, we expect such issues will often be linked inextricably with companies’ long-term performance.

We recognise that this is still a learning process and that approaches must be conscious and dynamic to be impactful. Through NZAMi and other initiatives, we can continue to develop and share with our industry, clients and investee companies as we all strive for positive outcomes.

Our NZAMi-committed portfolios

Over the last year, we have continued to develop our climate-related research and engagement practices across all our investment strategies. We see a clear need and responsibility to address the associated issues as a prerequisite to optimising long-term investment returns for clients. You can find details of our approach and ongoing plan for improvement in our annual Climate Report.

In addition to this firmwide activity, over the last year, portfolios amounting to 20 per cent of our assets under management have set climate-related targets for 2030 and 2040 that meet NZAMi’s standards.

Given our active and focused investment approach, it will be our fundamental research, stock selection and engagement with holdings that have the most significant climate-related impact. So, our related commitments must be embedded at a portfolio level from the outset rather than applied top-down on any blanket basis.

Where appropriate to our clients’ requirements, our investment strategies have developed net zero-aligned commitments consistent with their philosophy and process. We expect the quantum of NZAMi-committed assets to increase over time as more of our strategies obtain client support to be managed in this way.

We require portfolios that are managed in line with our NZAMi commitment to fulfil several elements, including:

  1. An interim target for 2030 consistent with a fair share of the 50 per cent global reduction in greenhouse gases, alongside the prioritisation of ‘real economy’ impacts
  2. Facilitation of investment in climate solutions
  3. Commitment to active engagement
  4. Transparency in reporting

Our NZAMi portfolio targets are focused on the robust alignment of each company with a 1.5C pathway and strategy appropriate to its industry and regions of operation.

Each committed portfolio will be invested and managed such that by 2030, at least 75 per cent of all holdings – or for less concentrated portfolios, at least 75 per cent of financed emissions – will have robust targets, strategies and performance that demonstrate company-level alignment with an appropriate fair share of a global net zero 2050/1.5C outcome.

For our committed funds, the 2030 commitments actually vary from 75 to 90 per cent, depending on the portfolio. But by 2040, all committed portfolio holdings will be so aligned.

The concepts of alignment and the pathways themselves are still evolving but, as described in our annual Climate Report, our methodology and assessments are rooted in the company-level criteria of the Paris Aligned Investment Initiative Net Zero Investment Framework.

We have extended and developed the framework using our bottom-up research and that of groups such as the Science Based Targets initiative, the Transition Pathway Initiative and our academic partnerships.

The current alignment status of holdings will vary in concentration by portfolio. But for reference, as at the end of July 2022, we assessed 30 per cent by value of our firmwide listed equity holdings to be ‘leaders’ in terms of commitment to targets and strategies that appear consistent with a global net zero/1.5C outcome.

Our research process requires us to monitor emissions performance. However, we do not consider the setting of a simple top-down portfolio or firmwide emissions pathway as a critical tool to direct our approach. We will keep this under review as we continue to aim for real-world impact.

For reference, as at the end of July 2022, the average carbon footprint of our firmwide listed equity holdings was 62 per cent lower than that of firms within the MSCI ACWI index2.

You can obtain details of our NZAMI-committed portfolios from the relevant fund pages at, or by contacting us.

We will provide regular progress updates through general portfolio communications and annual firmwide and product-level TCFD (Task Force on Climate-Related Financial Disclosures) reports.


1. We define these as:
•  Expansionary growth – demand grows, and supply rises to meet it 
•  Disruptive growth – demand doesn’t grow, but supply innovates to meet it better
•  Replacement growth - new demand supersedes old demand following broader change

2. The exact figure was 107 tonnes of carbon dioxide equivalent per million dollars invested. That figure incorporates scope 1 and 2 emissions in all cases and added scope 3 emissions for companies belonging to sectors defined as ‘material’ by the PCAF partnership of financial institutions. These include oil, gas and mining companies. For reference, our listed equity holdings represent 90 per cent of our total assets under management

Source: Factset. MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.


Risk Factors        

The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in November 2022 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

Potential for Profit and Loss

All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.

This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.

All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.

The images used in this communication are for illustrative purposes only.

Important Information

Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs.

Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford & Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.

Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances.

Financial Intermediaries

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Baillie Gifford Investment Management (Europe) Limited provides investment management and advisory services to European (excluding UK) clients. It was incorporated in Ireland in May 2018. Baillie Gifford Investment Management (Europe) Limited is authorised by the Central Bank of Ireland as an AIFM under the AIFM Regulations and as a UCITS management company under the UCITS Regulation. Baillie Gifford Investment Management (Europe) Limited is also authorised in accordance with Regulation 7 of the AIFM Regulations, to provide management of portfolios of investments, including Individual Portfolio Management (‘IPM’) and Non-Core Services. Baillie Gifford Investment Management (Europe) Limited has been appointed as UCITS management company to the following UCITS umbrella company; Baillie Gifford Worldwide Funds plc. Through passporting it has established Baillie Gifford Investment Management (Europe) Limited (Frankfurt Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in Germany. Similarly, it has established Baillie Gifford Investment Management (Europe) Limited (Amsterdam Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in The Netherlands. Baillie Gifford Investment Management (Europe) Limited also has a representative office in Zurich, Switzerland pursuant to Art. 58 of the Federal Act on Financial Institutions (“FinIA”). The representative office is authorised by the Swiss Financial Market Supervisory Authority (FINMA). The representative office does not constitute a branch and therefore does not have authority to commit Baillie Gifford Investment Management (Europe) Limited. Baillie Gifford Investment Management (Europe) Limited is a wholly owned subsidiary of Baillie Gifford Overseas Limited, which is wholly owned by Baillie Gifford & Co. Baillie Gifford Overseas Limited and Baillie Gifford & Co are authorised and regulated in the UK by the Financial Conduct Authority.


Baillie Gifford Investment Management (Shanghai) Limited 柏基投资管理(上海)有限公司(‘BGIMS’) is wholly owned by Baillie Gifford Overseas Limited and may provide investment research to the Baillie Gifford Group pursuant to applicable laws.  BGIMS is incorporated in Shanghai in the People’s Republic of China (‘PRC’) as a wholly foreign-owned limited liability company with a unified social credit code of 91310000MA1FL6KQ30. BGIMS is a registered Private Fund Manager with the Asset Management Association of China (‘AMAC’) and manages private security investment fund in the PRC, with a registration code of P1071226.

Baillie Gifford Overseas Investment Fund Management (Shanghai) Limited柏基海外投资基金管理(上海)有限公司(‘BGQS’) is a wholly owned subsidiary of BGIMS incorporated in Shanghai as a limited liability company with its unified social credit code of 91310000MA1FL7JFXQ. BGQS is a registered Private Fund Manager with AMAC with a registration code of P1071708. BGQS has been approved by Shanghai Municipal Financial Regulatory Bureau for the Qualified Domestic Limited Partners (QDLP) Pilot Program, under which it may raise funds from PRC investors for making overseas investments.

Hong Kong

Baillie Gifford Asia (Hong Kong) Limited 柏基亞洲(香港)有限公司 is wholly owned by Baillie Gifford Overseas Limited and holds a Type 1 and a Type 2 license from the Securities & Futures Commission of Hong Kong to market and distribute Baillie Gifford’s range of collective investment schemes to professional investors in Hong Kong. Baillie Gifford Asia (Hong Kong) Limited 柏基亞洲(香港)有限公司 can be contacted at Suites 2713-2715, Two International Finance Centre, 8 Finance Street, Central, Hong Kong. Telephone +852 3756 5700.

South Korea

Baillie Gifford Overseas Limited is licensed with the Financial Services Commission in South Korea as a cross border Discretionary Investment Manager and Non-discretionary Investment Adviser.


Mitsubishi UFJ Baillie Gifford Asset Management Limited (‘MUBGAM’) is a joint venture company between Mitsubishi UFJ Trust & Banking Corporation and Baillie Gifford Overseas Limited. MUBGAM is authorised and regulated by the Financial Conduct Authority.


Baillie Gifford Overseas Limited (ARBN 118 567 178) is registered as a foreign company under the Corporations Act 2001 (Cth) and holds Foreign Australian Financial Services Licence No 528911. This material is provided to you on the basis that you are a “wholesale client” within the meaning of section 761G of the Corporations Act 2001 (Cth) (“Corporations Act”).  Please advise Baillie Gifford Overseas Limited immediately if you are not a wholesale client.  In no circumstances may this material be made available to a “retail client” within the meaning of section 761G of the Corporations Act.

This material contains general information only.  It does not take into account any person’s objectives, financial situation or needs.

South Africa

Baillie Gifford Overseas Limited is registered as a Foreign Financial Services Provider with the Financial Sector Conduct Authority in South Africa.

North America

Baillie Gifford International LLC is wholly owned by Baillie Gifford Overseas Limited; it was formed in Delaware in 2005 and is registered with the SEC. It is the legal entity through which Baillie Gifford Overseas Limited provides client service and marketing functions in North America. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.

The Manager is not resident in Canada, its head office and principal place of business is in Edinburgh, Scotland. Baillie Gifford Overseas Limited is regulated in Canada as a portfolio manager and exempt market dealer with the Ontario Securities Commission ('OSC'). Its portfolio manager licence is currently passported into Alberta, Quebec, Saskatchewan, Manitoba and Newfoundland & Labrador whereas the exempt market dealer licence is passported across all Canadian provinces and territories. Baillie Gifford International LLC is regulated by the OSC as an exempt market and its licence is passported across all Canadian provinces and territories. Baillie Gifford Investment Management (Europe) Limited (‘BGE’) relies on the International Investment Fund Manager Exemption in the provinces of Ontario and Quebec.


Baillie Gifford Overseas is not licensed under Israel’s Regulation of Investment Advising, Investment Marketing and Portfolio Management Law, 5755-1995 (the Advice Law) and does not carry insurance pursuant to the Advice Law. This material is only intended for those categories of Israeli residents who are qualified clients listed on the First Addendum to the Advice Law.


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