The Net Zero Financial Advisers Initiative has called on 5,000 advisers to measure, report and reduce greenhouse gas emissions as five firms sign up to the pilot.
The initiative was developed by Net Zero Now, the carbon accounting and climate action platform, which aims to help businesses of all sizes fight climate change.
The UK government has set a target for the whole economy to reach net zero by 2050.
The launch of the new initiative includes three elements:
- An industry roadmap that sets out a standard for net zero against which IFAs can report and be measured
- A digital platform providing a solution for operators to calculate, report and reduce their emissions using tailored reduction plans
- The findings of a pilot of the initiative with five firms which showed an average carbon footprint of approximately 35 tonnes per year, equivalent to the emissions produced from driving a petrol car for nearly 90,000 miles.
The pilot firms are: Investing Ethically, James Brewster, The Path, Herbert Scott and Mosaac Ltd.
They all worked with Net Zero Now to undertake a full calculation of their greenhouse gas emissions.
In total, the pilot firms were responsible for over 170 tonnes of emissions in 2022.
Net Zero Now is working with each firm to build a tailored reduction plan and commit to specific targets.
Phil Cockrell, director and chartered financial planner at Investing Ethically, said: “As specialists in ethical investment, it’s important to us – and our clients – that we manage the environmental impacts of our business.
“We’ve been working to reduce our carbon footprint for some years now – taking steps to improve our energy efficiency, be more careful with resource use, and reduce our business mileage.
“We’re excited to be working with Net Zero Now, and this pilot initiative, as the next stage of improvement.”
Cockrell said in particular, his firm is keen to learn more about its scope 3 emissions, and how it might reduce these indirect parts of the carbon footprint.
Many of the pilot firms are already taking action to reduce their emissions, with common themes including exploring energy efficiency, purchasing renewable energy and changing employee commuting methods.
Longer-term, firms participating in the Net Zero Financial Advisers Initiative will be able to report on their emissions using the platform, evidence their performance in reducing their emissions versus government benchmark figures.
Neil Ross Russell, managing director of Net Zero Now, said: “By showing that they take the transition to a more planet-positive future seriously, these firms are leading the way for the entire sector, and our wider economy, to take action.
“Net Zero Now exists to fight the climate crisis and boost business success – our experience across multiple sectors shows the two go hand in hand. Financial advisers that join this important Initiative can help attract and retain staff, reduce costs and meet the increasing demand from clients for firms aligned with their own climate commitments.”
With roughly 5,000 financial advisory firms in the UK, the sector is estimated to be responsible for about 175,000 tonnes of greenhouse gas emissions in total.
By working with these businesses to set reduction targets of 30 per cent, delivered over the next five years, Net Zero Now said there is an opportunity to reduce emissions by around 50,000 tonnes - equivalent to the emissions produced by over 5mn gallons of petrol.
Liontrust and Fintel, the parent company of SimplyBiz and Defaqto, are supporting the initiative as founding development partners.
