The first pillar of this roadmap is central to our climate-risk management approach. The main anticipated actions will be: ■ Support the transition through the selection of methodologies, tools and the implementation of investment and engagement policies with the potential to An enhanced offering gradually bring our investment solutions in line with the emission reduction trajectory envisaged in the Paris Agreement, including a focus on the impact Our investment activities are integrating climate change considerations in their of the most carbon intensive players in our portfolios offering and follow key performance metrics: ■ Improve climate transparency disclosures at product and entity-level ■ Asset Management Europe manages two “Net Zero” funds with an investment reporting strategy focused on the low carbon transition. Furthermore, the carbon footprint is monitored and disclosed for all their funds. Asset Management These objectives reinforce the existing framework that our investment businesses Europe is preparing its climate action plan and objective in line with their have implemented such as the investment principles related to the thermal coal commitment to the framework of the Net Zero Asset Manager Initiative sector*, or the best-in-class investment approach followed by most of our entities. The investment business lines’ reporting obligations and the indicators chosen ■ In 2021, Merchant Banking launched its impact fund “Five Arrows Sustainable internally as part of the implementation of MiFID ESG will enable us to better Investments”, aiming at financing the transition to a low-carbon economy. assess the performance of our investment solutions in terms of alignment with the Merchant Banking is currently working on the definition of a climate strategy trajectory of the Paris Agreement. relevant to their offering ■ Our Wealth Management business in the UK developed its “Exbury” strategy, Engagement at collective and direct levels which in addition to its return objective, actively invests in assets that support We are convinced that the transition to a low carbon economy and the mitigation the goals of the Paris Agreement (net zero global emissions by 2050) and the fair of the most significant climate-related risks cannot be driven only by individual transition to a lower carbon world actions. That is why our investment businesses have developed direct and ■ On its “Mosaique” funds, Rothschild & Co Bank AG monitors the “transition collective engagement actions to support investee companies in their score” of the companies they invest in transition pathway. ■ Direct engagement: Voting policy and discussions with companies in which the business invests are initiated to raise awareness for the Group’s expectations. For instance, in 2021 our Asset Management entity in Europe initiated a discussion on ESG considerations with 94 issuers** ■ Collective engagement: the investment businesses partner with other players to reinforce the promotion of an integrated ESG approach, or to take common commitment regarding sustainable practices (Climate 100+, Net Zero Asset Managers Initiative, IC International) * R&Co Investment principles related to thermal coal AM Europe, Engagement report 2021 ** R&Co Asset Management Europe, Engagement and Voting Report 2021