The National Trust’s £1.6 billion investment portfolio has experienced a decrease in value, in part through its allocation to eco-friendly wealth managers.
Published on Monday, the National Trust’s annual report revealed that the fund’s allocation has suffered a decrease of over £11 million, representing an 11.7 percent decline between March 2022 and February of the current year.
In 2021, the Robeco Climate Global Credits Fund was chosen to manage a portion of the National Trust’s assets, accounting for 6.1 percent of its total portfolio, as the charity pursues its goal of achieving net-zero carbon emissions by 2030 and divesting from fossil fuels. This fund is committed to limiting global temperature increases to well below 2°C through its investments.
Despite returning just under 1 percent growth at the end of the previous financial year, the Rotterdam-based firm’s performance has fallen short of expectations this time around.
The Robeco Climate Global Credits Fund primarily deals with nongovernmental bonds and claims to have the first-ever investment strategy fully compliant with the 2015 Paris Agreement on climate change. This international treaty aims to keep temperature rises ideally below a 1.5°C increase, necessitating a 50 percent reduction in global emissions by 2030.
Former Prime Minister Ms. Truss raised concerns about the level of public support for the UK Government’s net-zero emissions target by 2050, suggesting that the initiative has been implemented without full democratic consent.
During a speech at the Institute for Government think tank, Ms. Truss called on Rishi Sunak to consider postponing or abandoning specific key measures related to the net-zero agenda, with the aim of preventing additional financial burdens on households.
The National Trust’s efforts to align its investment strategy with climate change goals while maintaining a healthy financial position have faced challenges. The investments managed by Robeco have become the worst-performing assets in its portfolio, with Bloomberg’s bond market benchmark reporting a -10.4 percent performance, indicating that Robeco fell short of anticipated returns.
In recent years, environmental, sustainable, and governance investments, which encompass firms committed to climate change targets, have faced difficulties due to global market disruptions caused by the pandemic and geopolitical events, including Russia’s conflict in Ukraine.
Broader Debate Needed
Ms. Truss emphasised the need for a broader debate concerning the costs associated with implementing climate change policies, the approach taken in implementing these measures, and the extent of international consensus on addressing climate issues. She argued that these critical aspects had not been adequately discussed and debated and expressed concerns that the net-zero agenda had been institutionalised without obtaining democratic consent.The National Trust, with 5.7 million members, has faced criticism for allegedly promoting a “woke” agenda and diverging from its central mission of preserving heritage and countryside, as claimed by the Restore Trust group, which seeks changes in the National Trust’s leadership.
The National Trust’s commitment to climate targets has frequently been labelled as part of this perceived agenda.
The National Trust’s fortune stands at £1.5 billion, reflecting a decrease of £49 million in the year leading up to February 28, 2023, as revealed in a statement of its annual accounts. Several of its investments yielded negative returns, contributing to this decline.
Among the funds that underperformed expectations were the Newton Real Return Strategy, Nordea MA Strategy Fund, RBC Funds (Lux)–Vision Global Horizon Equity Fund, and Ownership Capital Global Equity.
Additionally, the charity reported record spending of £179.6 million for the conservation of historic buildings and collections under its care.
‘No Investment Is Free of Risk’
Regarding investment risks, the spokesman said: “No investment is free of risk but although certain investments may fall in value, investment return targets are delivered by the portfolio as a whole, rather than any one particular component and we assess each fund’s performance against a benchmark.“Decisions to disinvest are taken with a long-term view and not in response to short-term fluctuations in value.”
A spokesman for Robeco—the firm managing a portion of the National Trust’s investments—focused on providing context on the challenges faced by institutional investors in the bond markets in 2022.
He said: “As is widely known, 2022 was a difficult year for bond markets across the globe, largely driven by the rising interest rates set by central banks, such as the Bank of England. Prices of bonds are inversely related to interest rates, so as interest rates rise, bond prices typically fall.”
The spokesman also noted that the performance of the Robeco Climate Global Credits fund in 2022 was consistent with market expectations.
He highlighted that returns for UK gilt and UK corporate bond markets fared worse during the same period. Robeco’s globally diversified strategy was cited as a benefit, and the fund was noted for aligning its investments with the climate goals outlined in the 2015 Paris Agreement.
Speaking to The Telegraph about the National Trust’s investment decision, the spokesman added, “By excluding fossil fuels the fund’s carbon intensity is meaningfully lower than the market, and going forward the fund will decarbonise further to help contribute to achieving the National Trust’s climate targets.”
