Net Zero Commitment
AB supports the Paris Agreement, and we’re committed to aligning our firm with a 1.5 degree pathway by 2050 while acting in the best interest of our clients.
AB’s Responsibility team, comprising experts in corporate responsibility and environmental, social and governance issues, partners with our investment teams at the heart of our responsible investing practices. Their work is supported by internal and external resources, and overseen by our Responsibility Steering Committee and AB’s Board of Directors.
in Portfolios with Purpose
in assets managed with ESG integrated in investment process
meetings with company management teams in 2021
ranking globally in proxy voting for climate-related proposals
clients completed the Climate Change & Investment Academy
Data points as of December 31, 2021.
AB and the Columbia Climate School are partnering to tackle climate change. Together, we hope to research the most pressing climate issues, embed those insights throughout our investment process where applicable and educate others.
Chilean power generation depends heavily on coal, a very capital-intensive industry, making companies reluctant to shutter operational coal plants. Also, many price-sensitive consumers can’t shoulder higher electricity bills to subsidize the transition to renewable energy.
We’ve been engaging with the four largest Chilean power generators (AES Andes, Colbún, ECL and Enel Chile), encouraging management to phase out coal plants and create innovative ways to finance the renewable transition. We demonstrated that the cost of capital is lower for firms focused on greener power sources, that existing coal plants cost more than new renewable plants, and that rising carbon taxes and regulation will make existing coal plants less competitive.
The companies were receptive. In the first half of 2021, ECL announced plans to close all coal-powered plants by 2025. AES Andes announced that it would close more than half of its coal facilities. To help vulnerable consumers endure higher short-term prices during the green power transition, AB engaged with the Chilean government and bankers to develop CHIPEC (Chile Electricity PEC SpA). This entity borrowed approximately $500 million in 2021 to finance residential consumer electric bills, helping bridge the gap until prices decline later this decade. AB was an anchor order in the bond deal and continues to hold it, given that it promotes both social considerations and the move to renewable power.
We’re pleased by this progress but will continue advocating for the closure of remaining coal plants in Chile while looking for creative ways to finance the energy transition—with an eye toward reducing social costs.
In support of South African diversified energy company Sasol’s decarbonization efforts, AB continued engaging in 2021 as colead of the Climate Action 100+ (CA 100+) investor cohort. Although Sasol still has a long road ahead to achieve its climate objectives, the company made substantial progress in 2021.
After engaging with Sasol early in 2021, AB and the other CA100+ investors escalated concerns about the company’s decarbonization plans to the firm’s board. In early September, we wrote to the board relaying investors’ expectations for disclosure of its climate strategy, including a suitable transition plan, a clear approach to net zero by 2050, a supporting capital plan and openness about remaining uncertainties.
Later that month, Sasol released robust plans for its net-zero 2050 commitment, new emissions-reduction targets, a decarbonization strategy, capital-allocation plans, a CA100+ benchmark self-assessment and a TCFD statement. It also increased its renewable energy procurement at its Secunda site—the largest single carbon-emitting site in the world—from 900 to 1,200 megawatts by 2030.
In November, AB and the CA100+ cohort met with Sasol’s board to discuss the strategy, its implementation and the financial, political, and operational feasibility of proposed solutions and fossil fuel alternatives. Later that month, management’s nonbinding climate-transition-plan resolution was approved by 96% of shareholders. AB and the CA100+ investor cohort will send a follow-up letter emphasizing the importance of effectively implementing the plan and will continue engaging in 2022.
In 2019, AB voted against one of National Vision’s directors: the firm had failed to remove its classified board and supermajority-vote requirement to change governing documents in the year after its initial public offering. The company had other shareholder-unfriendly provisions, including a plurality voting standard, no shareholder rights to call a special meeting or act by written consent, and no proxy access.
We continued to vote against the company in 2020 because the classified board and supermajority voting provisions remained, but its 2020 proxy statement indicated plans to sunset the provisions in 2021. Finally, after several engagements with the company on these governance issues, we saw National Vision reflect our feedback in its 2021 proxy, eliminating its classified board and supermajority voting requirement. The company also published its first corporate responsibility report, which contained a comprehensive materiality assessment and disclosures under both Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards.
Engagement generates insight into issuers’ strategies, competitive positioning and how they address risks and opportunities, including potential material ESG considerations. It also helps us assess management, strategy, operations and governance structure. This insight can enhance our research and investment decisions—with the ultimate goal of generating risk-adjusted returns for our clients.
Engagement helps us advocate for our clients’ interests—enabling us to share our ESG philosophy and corporate-governance policies to try to effect positive and sustainable change by issuers. Discussions can focus on strategic, financial, and ESG and climate-related issues, but the goal is always the same: to encourage firms to make decisions with a long-term view that supports positive, sustainable financial outcomes for them, their stakeholders and our clients.
We work closely with non-AB investors, asset owners and ESG-focused organizations on engagement. Collaboration can happen when we’ve independently arrived at the same conclusion as other managers and believe that working together might help address specific issues. Collaboration can also occur when we believe that issues might be better addressed through a “common ask.”
Our fixed-income ESG research platform, PRISM, provides independent ESG assessments and scores that impact investment decisions. The goal, of course, is straightforward: better and faster information can empower better decisions.
ESIGHT is a one-stop online shop where AB investment teams can access and share proprietary information about corporate ESG practices. We’ve launched several ESIGHT enhancements, including an ESG knowledge center, COVID-19 research and country ESG scores for fixed income.
As of December 31, 2021
As of December 31, 2021
We manage US$31 billion in Portfolios with Purpose today, one of the most rapidly growing segments of our business. We also manage US$524 billion in assets that use ESG integration and other enhancements.
Achieve additional responsibility objectives, such as climate resilience, ESG improvement or best-in-class allocations. These portfolios adopt a range of strategies to improve management of ESG issues and fall into one of the following three subcategories; Climate Conscious, ESG Leaders and Change Catalysts.
Identify environmental or social challenges presented by the United Nations’ Sustainable Development Goals (SDGs) and target investment in issuers that provide products or services to tackle them. Prominent themes include climate, health and empowerment.
Invest in issuers that might provide a positive and measurable impact on society or the environment.
Efforts to stem climate change are gaining momentum around the world. Many consumers, businesses and policymakers are recognizing the need for change.
Healthcare spending is rising, and people are living longer, which raises complex issues for access to high-quality and affordable medicine and long-term care.
Many sectors of society are marginalized by economic and social forces. Physical and technological infrastructure is needed to enable sustainable economic development, employment growth, poverty eradication and social inclusion.
Responsible sovereigns provide the foundation for the private sector to innovate and for effective and accountable public policymaking.
|Full-Time/Part-Time||Female||% Female||Male||% Male||Grand Total||% of Total|
|Region||Female||% Female||Male||% Male||Grand Total||% of Total|
|Asia ex Japan||225||51||214||49||439||11|
|Exempt vs. Nonexempt||Female||% Female||Male||% Male||Grand Total||% of Total|
|Gender||Hispanic or Latino||White||Black or African American||Native Hawaiian or Other Pacific Islander||Asian||America Indian or Alaska Native||Two or More Races||Grand Total|
|Executive/Senior Officials and Managers||Female||-||4||1||-||-||-||-||5|
|First/Mid Officials and Managers||Female||11||126||10||1||35||-||6||189|
|Grand Total||278||2,019||179||6||491||9||57||3, 039|
|2018||2019||2020||% Change from
2019 to 2020
|Elec. Cons. (kWh)||15,690,010||15,335,173||11,706,142||–24%|
|Total Square Feet (SF)||1,215,793||1,381,743||1,634,579||18%|
|Tons CO2e / SF||0.01013||0.00849||0.0038||–55%|
|Tons CO2e / capita||3.381||3.043||1.6||–47%|
|Female||Male||Non-Binary||Did not disclose gender|
|African American or Black||0||1||0||0|
|Alaskan Native or Native American||0||0||0||0|
|Hispanic or Latinx||0||0||0||0|
|Native Hawaiian or Pacific Islander||0||0||0||0|
|Two or More Races or Ethnicities||0||0||0||0|
|Did not disclose demographic background||0|