Kingfish 2024 Climate Statement

ANNUAL REPORT
2024
31 MARCH
CLIMATE STATEMENT
JULY
2024
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01 | Introduction
This Climate Statement is dated 31 July 2024 and is signed on behalf of the Kingfish Board by:
R. A. Coupe
Chair
C.A. Campbell
Chair of the Audit and Risk Committee
Climate Statement
23Climate Statement
About Kingfish
Kingfish Limited (“Kingfish”) is a listed investment company (LIC)
that invests in New Zealand companies. The Kingfish portfolio is
managed by Fisher Funds Management Limited (“Fisher Funds” or
“the manager”).
Kingfish listed on the NZX on 31 March 2004.
First climate statement
Kingfish is a climate-reporting entity (CRE) under the Financial
Markets Conduct Act 2013.
This is Kingfish’s first climate statement and is for the period 1 April
2023 to 31 March 2024.
This statement complies with the Aotearoa New Zealand Climate
Standards issued by the External Reporting Board (XRB). It is set out
in the following sections: Governance, Strategy, Risk management,
and Metrics and Targets.
This statement accompanies Kingfish’s Annual Report for the same
period which contains more information about Kingfish which can
be found on the Kingfish website.
Adoption provisions
Kingfish has adopted all first-year adoption provisions as detailed
in Aotearoa New Zealand Climate Standard 2: Adoption of Aotearoa
New Zealand Climate Standards (NZ CS 2). See Appendix 1.
This climate statement has been prepared
in line with the disclosure requirements as
set out in New Zealand’s mandatory climate-
related reporting requirements.
Introduction
01 Introduction
3
02 Governance6
03 Strategy
14
04 Risk management
34
05 Metrics and targets
42
06 Case studies
58
07 Appendices64
08 Glossary
68
Cover photo: Matt Logan
Contents
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01 | Introduction
Reasonable care
This climate statement is not financial advice and is
unaudited. Readers are advised to seek financial advice
before acting or relying on any information in this
climate statement.
This report contains climate-related disclosures that
reflect forward-looking analysis, including climate-
related risks and opportunities and scenario analysis
relevant to Kingfish. While reasonable care has been
taken in their preparation, these disclosures should
not be considered a forecast of climate, investment,
performance, financial or other outcomes. The
identified climate-related risks and opportunities and
scenarios may not eventuate and if they do, the actual
impacts may differ materially from what is described in
this report.
In addition, there are limitations to the data and data
modelling methodology used in this report. All due
care has been taken in the collection and modelling
of data used, however no warranties are made that
the data, or reports generated using the data, are
complete and error-free. The climate impact data used
in this climate statement was provided by Institutional
Shareholder Services (Australia) Pty Limited (“ISS
ESG”) as at 31 March 2024. ISS ESG gathers emissions
data from publicly available sources (public filings)
or creates modelled data using its proprietary sector
classifications and financial information. ISS ESG
methodology, calculations and models, do not always
align with the Partnership for Carbon Accounting
Financials (PCAF) standard. Data was not publicly
available for all securities held and ISS ESG modelling
has been applied in those cases. The underlying
emissions calculation used by ISS ESG was not made
available for independent assurance due to intellectual
property constraints. ISS ESG updates its data sets
regularly and retrospectively and as such, results
in reports generated from ISS ESG data may vary
depending on the date a report is run. Where this
creates a material difference in reporting, such data
may need to be restated in future climate statements.
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02 | Governance
7Climate Statement
Governance
This section details the responsibilities that
Kingfish and Fisher Funds (as manager)
have in the governance and management of
climate-related risks and opportunities.
Kingfish governance and management of climate-related
risks and opportunities .....................................................................8
Kingfish Board ..................................................................................11
Governance process ........................................................................12
Fisher Funds ESG Committee ..........................................................13
Incentives and remuneration ...........................................................13
02
Governance
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02 | Governance
Kingfish’s Board is responsible for establishing and
implementing Kingfish’s corporate governance
framework. It is committed to fulfilling this role
according to best practice, having appropriate
regard to applicable laws and the NZX Corporate
Governance Code and the Financial Markets
Authority’s Corporate governance in New
Zealand — Principles and guidelines. The Board
oversees the management of Kingfish. The day-
to-day portfolio and administrative management
responsibilities of Kingfish are delegated to
Fisher Funds. This includes the management
of climate-related risks and opportunities and
the preparation of climate-related financial
disclosures.
Kingfish governance and
management of climate-related
risks and opportunities
Kingfish’s Board recognises the importance of good corporate
governance and is committed to ensuring that Kingfish meets
best practice governance principles to the extent that they are
appropriate for Kingfish’s operations.
Corporate governance comprises the principles, practices
and processes that determine how a company is directed and
controlled. Good corporate governance supports investor
confidence. It is also critical to promoting and facilitating fair,
efficient and transparent financial markets. Good corporate
governance allows directors to focus on growth, value creation and
long-term sustainability.
Principles for good corporate governance include having:
•high standards of ethical behaviour throughout an organisation
•transparent, fair and reasonable remuneration for directors
•a board with a balance of skills, knowledge, experience,
independence and perspectives
•a board that respects the rights of stakeholders.
Figure 1 on the following page shows how the
Kingfish Board and Kingfish Audit and Risk
Committee (ARC) oversee the preparation of its
climate statements by Fisher Funds. The Kingfish
ARC focuses on audit and risk management and
specifically addresses responsibilities to do with
financial reporting and regulatory compliance,
including overseeing compliance with climate-
related disclosure regulation.
The Kingfish Board oversees the climate-related
risks and opportunities within the Kingfish
investment portfolio.
Investors should also read the full Kingfish
corporate governance statement within the 2024
Annual Report.
Photo: Claire Horwood
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Climate Statement
10
02 | Governance
Kingfish Board
Figure 1: Simplified governance structure for management
of climate-related risks and opportunities
Kingfish Board
Final sign off of the climate statement.
Kingfish ARC
Oversees Fisher Funds preparation of climate-
related disclosures.
Fisher Funds - The Manager
Under the Management & Administration
agreement between Kingfish and Fisher
Funds, the Manager is responsible for
management of all potential risks and
opportunities that could impact Kingfish. This
includes identifying, assessing, measuring
and managing climate-related risks and
opportunities for the Kingfish portfolio,
including scenario analysis, transition
planning, establishing metrics and targets
and measuring the portfolio’s GHG emissions
as well as delivering this climate statement.
The Kingfish Board assesses the extent to which it has directors
with the appropriate skills and competencies to provide oversight
of climate-related risks and opportunities. The Board-appointed
Remuneration and Nominations Committee considered each
director’s skillset based on directors’ self-assessments and maintains
a directors’ skills, competency and experience matrix. Directors
are expected to take individual accountability to maintain relevant
competencies as part of their director’s duties. These steps enable
the Kingfish Board to maintain skills and competencies for oversight
of portfolio’s climate-related risks and opportunities.
Details about
the directors, including their experience and background, are
available on the Kingfish website.
The Kingfish Board and its committees meet at least 10 times
a year and may schedule extra meetings as needed to fulfil
its responsibilities which includes climate-related risks and
opportunities. Climate was considered in 3 board meetings, 2 ARC
meetings and 2 investment committee meetings.
The Kingfish ARC provides climate-related disclosure reporting to
the Kingfish Board. The Kingfish Board is responsible for approving
the overall climate-related strategy and adoption of recommended
metrics and targets.
For additional information on the Kingfish Board and ARC charters,
refer to the Kingfish website.
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Climate Statement
1213Climate Statement
02 | Governance
Fisher Funds ESG Committee
3. The IMT presents any relevant approach,
analysis or targets to be included in relevant
climate statements for consideration by
the Fisher Funds Environmental, Social and
Governance (ESG) Committee. For more
information about the ESG Committee, refer to
the section Fisher Funds ESG Committee.
4. The annual climate statement is developed
by the IMT and then endorsed by the
ESG Committee before being provided to
independent auditors (where applicable).
5. Fisher Funds then utilises two of its Board
subcommittees to assist its Board’s oversight of
climate-related risks and opportunities. These
are the Investment Strategy Committee and the
Audit and Risk Committee.
6. Metrics and targets for Kingfish are received by
the Investment Strategy Committee, reviewed,
and then submitted to the Fisher Funds Board
for recommendation to the Kingfish ARC and
Board. This takes place annually.
7. The annual climate statement for Kingfish is
received by the Fisher Funds ARC (with any
applicable independent assurance or audit
report), and then submitted to the Fisher Funds
Board for recommendation to the Kingfish ARC
and Board. This takes place annually.
8. Once Kingfish Board approves the climate
statement, it is disclosed.
Governance process
Oversight of climate-related risks and
opportunities, scenario analysis, and strategies
is undertaken by the Kingfish ARC and Kingfish
Investment Committee.
The Kingfish ARC is informed about climate-related
risks and opportunities by regular reports from
Fisher Funds.
Fisher Funds reports to the Kingfish Board or its
subcommittees on these matters because it is the
manager of Kingfish. This means that the returns
Kingfish shareholders receive are dependent on
the investment decisions of Fisher Funds, as well
as the performance of the investments. These
decisions include decisions on climate-related
risks and opportunities. In making these decisions
Fisher Funds follows a governance process that is
overseen by the Fisher Funds Board. The metrics,
targets, and climate statement for Kingfish are
only recommended to the Kingfish ARC for its
approval, once Fisher Funds has completed
this process. This enables the Kingfish Board to
discharge its due diligence obligations when
relying on the climate-related materials it receives
from the Manager. A summary of the process is set
out below.
1. Climate-related roles and responsibilities
are assigned to Fisher Funds’ Investment
Management Team (IMT) by its Chief
Investment Officer.
2. Through scenario analysis, the IMT completes
an assessment of climate-related risks and
opportunities and, where material, these risks
and opportunities are factored into investment
decisions.
The Fisher Funds ESG Committee is a management appointed
committee. Members include the Fisher Funds Chief Executive
Officer, General Counsel, Chief Investment Officer, Chief Investment
Strategist, and the Responsible Investment Specialist. The ESG
Committee meets bi-monthly or at a minimum of 5 times a year.
Over the period, the Fisher Funds ESG Committee increasingly
focused on the requirements for the climate disclosure regime.
A dedicated Responsible Investment Specialist joined the IMT
(reporting to the Chief Investment Officer) and provided expert
guidance for the development of targets and reports, with
responsibility for managing the ESG Committee. A Responsible
Investment Analyst was hired in April to report to the Responsible
Investment Specialist and support detailed analysis of data and
production of reports.
The remit and administration of the ESG Committee was formalised
through an update to its Charter in February 2024.

This included
adding membership and quorum requirements, extending the
responsibilities of the Committee to reflect the climate standards
work, and adding responsibility for reviewing metrics and targets
received from the IMT.
It is expected that Fisher Funds’ processes and approach will
continue to evolve following the baseline work completed in this
first year of reporting.
Incentives and remuneration
Fisher Funds provides all necessary resources and staff for Kingfish
(other than the Board and its committees). Kingfish does not employ
any staff.
Fisher Funds did not incorporate specific climate-related
performance metrics into its remuneration policies during the
period. As a result, no management remuneration was linked to
climate-related risks and opportunities in the period.
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Strategy
This section details how climate change is
currently impacting Kingfish and how it may
impact Kingfish in the future. It also sets out
Fisher Funds’ approach to investing and the
investment objectives of Kingfish.
Photo: Claire Horwood
15Climate Statement
03 | Strategy
Kingfish investment objectives and philosophy .............................16
Fisher Funds’ approach to investing ................................................17
Strategy—Transition plan .................................................................18
Climate risks and opportunities impact on Kingfish .......................19
Climate risk assessment framework ................................................19
Scenario analysis: Approach ............................................................22
Scenario analysis: Time horizons selected ......................................24
Scenario analysis: Narratives ...........................................................26
Climate-related risks and impacts ...................................................29
Opportunities ...................................................................................32
03
Strategy
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03 | Strategy
Fisher Funds’ approach
to investing
Kingfish investment objectives
and philosophy
Kingfish’s key investment objectives are to:
•achieve a high real rate of return, comprising both income and
capital growth, within risk parameters acceptable to the directors
•provide access to a diversified portfolio of New Zealand quality
growth stocks through a single tax efficient investment vehicle.
To achieve these objectives, Kingfish follows an investment
approach based on 3 broad principles:
•invest as a medium to long-term investor exiting only because of
a fundamental change in the original investment case
•invest in companies that have a proven track record of growing
profitability
•construct a diversified portfolio of investments based on the
STEEPP investment criteria — find more information on STEEPP on
the Kingfish website.
Fisher Funds has a formal responsible investment policy and
framework and has an approach to climate risk assessments which
the Kingfish Board has adopted — it is detailed in the following
section: Fisher Funds’ approach to investing.
Fisher Funds is one of New Zealand’s largest
specialist investment managers, and adopts an
active, fundamentals-based approach to investing.
The approach involves handpicking investments
and reviewing every potential investment on its
own fundamentals. This bottom-up approach to
investing means the IMT can be highly selective
when evaluating entities to include in investment
portfolios.
The IMT identifies high quality and growing
businesses to invest in New Zealand and across
the globe. The team is looking for businesses that
have sustainable competitive advantages, long
runways for growth, and talented management
teams that are long-term focused and aligned with
shareholders’ expectations. When the team finds
companies with these qualities, it will often aim to
take relatively meaningful positions and hold them
for the long term.
While Fisher Funds aims to hold investments for
the long term, positions in these entities may
be sold or increased/decreased when there is a
change to the investment thesis that positively or
negatively impacts prospective returns or risks.
Fisher Funds believes that this complements
Fisher Funds’ responsible investment approach.
Identifying high quality businesses to hold for the
long term also requires assessing environmental,
social and governance factors that could help, or
hinder, a business through time. This, along with
Fisher Funds’ active engagement and stewardship
approach, supports Fisher Funds’ overall
responsible investment framework.
Fisher Funds assesses both the upside of
a potential investment, as well as potential
risks. Climate risk — and the potential costs of
transition to a lower carbon economy — may
impact many businesses in the years ahead. The
IMT considers these climate risks (along with all
other investments risks) and factors them into its
investment decision-making when relevant.
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19Climate Statement
03 | Strategy
Climate risks and opportunities
impact on Kingfish
Strategy — Transition plan
To assess the current impacts of climate change
on Kingfish, a climate risk and opportunity
assessment was carried out for the Kingfish
portfolio as at 31 March 2024. This was completed
as a standalone process that was worked through
with the IMT. The scenario analysis looked forward
to plausible futures to understand the possible
impacts of climate change on the portfolio over
different time horizons, which also supported the
risk assessment process.
Climate risk
assessment framework
As the manager of the Kingfish portfolio Fisher
Funds is committed to integrating climate-related
considerations into its overall strategy. In this period,
Fisher Funds has made progress towards developing
a transition plan by:
•conducting a comprehensive climate risk and
opportunity assessment across all its managed
investments, including the Kingfish portfolio
•building its internal capacity to analyse climate-
related risks and opportunities
•incorporating climate-related risks and
opportunities into its investment process.
Fisher Funds is committed to the ongoing
development of its transition plan.
Fisher Funds took a significant step forward by
completing its first comprehensive climate risk
and opportunity assessment across the Kingfish
portfolio. This initial assessment was designed
to evaluate the assets of the investments based
on the available information and resources. The
details of this process are set out in the Risk
management section. The risks and opportunities
identified through this assessment identified
potential anticipated future impacts of climate
change on the Kingfish portfolio through physical
risks (refer to the table in the climate-related
risks and impacts section). Fisher Funds, with
the Kingfish Board will conduct annual reviews
of climate risk and opportunity for Kingfish, and
is committed to continuously improving the
assessment process over time.
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21Climate Statement
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03 | Strategy
Key definitions to know
Kingfish uses the definitions as prescribed in
the Aotearoa New Zealand Climate Standard 1:
Climate-Related Disclosures (NZ CS 1).
Climate-related risks:
The potential negative impacts of climate
change on an entity.
Physical risks:
Risks related to the physical impacts of climate
change. Physical risks resulting from climate
change can be event-driven (acute) such as
increased severity of extreme weather events.
They can also relate to longer-term shifts
(chronic) in precipitation and temperature and
increased variability in weather patterns, such as
sea level rise.
Transition risks:
Risks related to the transition to a low-emissions,
climate-resilient global and domestic economy,
such as policy, legal, technology, market
and reputation changes associated with the
mitigation and adaptation requirements relating
to climate change.
Opportunities:
The potentially positive climate-related
outcomes for an entity. Efforts to mitigate
and adapt to climate change can produce
opportunities for entities, such as through
resource efficiency and cost savings, the
adoption and utilisation of low-emissions energy
sources, the development of new products
and services, and building resilience along the
value chain.
Figure 3: Key definitions
Quantitative
identification
Qualitative
identification
Analysis
Evaluation
Figure 2: Fisher Funds climate risk and
opportunity assessment framework
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Climate Statement
2223Climate Statement
What is scenario analysis?
Scenario analysis takes inputs of entity carbon emissions, and
global climate scenario parameters to assess the potential financial
outcomes for entities that have been invested in (e.g. an entity
or debt security listed on a stock exchange) across a range of
potential future scenarios. This is a way to systematically explore
the potential effects of a range of plausible future events under
conditions of uncertainty.
Scenario analysis: Approach
Low physical riskHigh physical risk
Low transition risk
High transition risk
OrderlyHothouse
Too Little,
Too Late
Disorderly
IEA Net Zero Emissions by 2050
NGFS Net Zero 2050
IEA STEPS
NGFS NDCs*
NGFS Current Policies
IEA APS
*Note that NGFS NDCs are aligned
to a ‘Too Little Too Late’ world in the
FSC guide, however NGFS align the
scenario to a hothouse world.
Figure 4: Scenario datasets utilised to assess in various scenarios
Fisher Funds on behalf of Kingfish ran its first
climate scenario analysis exercise in the year
ending 31 March 2024. This was a separate
process to the Kingfish portfolio investment
strategy review process due to the timing of the
requirements of NZ CS 1.
Fisher Funds worked to select 3 plausible versions
of the future and used the scenarios for climate
risk and opportunity analysis. Much of the
scenario analysis at the quantitative level was
completed using the ISS ESG solution.
The data that the ISS ESG solution used for
this reporting period ending 31 March 2024, is
information disclosed by the entities invested
in, in the 2022 calendar year. This information
is taken from Sustainability or Annual Reports,
Carbon Disclosure Project disclosures, or other
resources. When this is not available, ISS ESG has
applied estimated emissions models to generate
emissions data.
Data currently available and timeliness of
collection from third party aggregators, including
ISS ESG, have limitations due to the infancy stage
of climate-related disclosure both in New Zealand
and internationally. This is not limited to ISS ESG
and is a common issue across the industry. Fisher
Funds expects data to become more reliable
as timeliness and quality of data disclosed by
entities improves over time. Fisher Funds also
expects greater worldwide standardisation
as more jurisdictions require climate-related
reporting by law and is committed to engaging
with ISS ESG on their offering and will continue to
monitor data providers as they continue to evolve.
More information about ISS ESG is included in
Appendix 2.
The scenario analysis process was undertaken by
subject matter experts within IMT. Results were
shared with the governance bodies in accordance
with the governance process documented in the
Governance section.
The climate impact assessment within the ISS ESG
solution contains climate scenario analysis and
modelling using Network for Greening Financial
Sector (NGFS) scenario data and the International
Energy Agency (IEA). ISS ESG’s solution updates
the scenario alignment dataset annually,
enhancing the methodology where necessary so
that the underlying scenarios reflect the most up-
to date data available.
Fisher Funds recognises that for investors to make
informed decisions, it is useful for information
on investment products from all providers to
be comparable. The Financial Services Council
(FSC) of New Zealand also recognises this and
has created climate scenario narratives that can
be adopted by the industry. Fisher Funds is using
the FSC New Zealand Climate Scenario Narratives
for the Financial Services Sector as a guide to
help in developing consistent and comparable
information.
The IMT confirmed the time horizons to be used,
reviewed the FSC climate scenario narratives,
and participated in climate scenario narrative
workshops which also supported their analysis
of Kingfish. As a result, the IMT determined that
2025 is too short as a time horizon and Fisher
Funds believes that more of these societal shifts
(as referred to in the FSC document) may be seen
by 2030. Altering the short-term time horizon also
meant that the medium-term time horizon was set
to 2040. The long-term horizon was retained at
2050. These time horizons have been reflected in
the risk assessment.
Climate scenarios are estimates and are not
forecasts. The future is inherently uncertain.
Climate scenarios are only plausible versions of
the future that help in understanding what the
future could look like. The climate scenarios are
an important method used to support analysis
and evaluate the climate risks and opportunities
identified, however they may not reflect what
does occur in the future. Scenarios are based on
many assumptions and are limited by the data
available at the time. It is important to consider the
limitations of the scenarios.
03 | Strategy
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Scenario analysis: Time
horizons selected
An important part of scenario
analysis is selecting appropriate
time horizons. It was agreed
by Kingfish and Fisher Funds
that the following time horizons
would be used.
Short term: present to 2030
•More or less aligns with short to medium-term
investment time horizons for investors.
•Aligns with many interim targets of companies
invested in.
•Captures the impact of climate change for
investors who may have liquidation events in
this timeframe.
Medium term: present to 2040
•More or less aligns with short to medium-term
investment horizons for investors.
•Captures the impact of climate change for
investors who may have liquidation events in
this timeframe.
•More likely to capture the impact of policy
changes in countries around the world as
they aim to set up frameworks to encourage
decarbonisation.
Long term: present to 2050
•More or less aligns with long-term investment
horizons for investors.
•Captures the impact of climate change for
investors who may have liquidation events in
this timeframe.
•Captures the impact of climate change over a
long time horizon where impacts are more likely
to be present in the economy.
03 | Strategy
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Climate Statement
2627Climate Statement
Scenario analysis: Narratives
Fisher Funds has adopted the
scenario narratives from the
FSC guide. The following are
high-level descriptions of the
scenarios — these should be
considered against the more
detailed information in the
guide on the FSC website.
These narratives have been adjusted to
reflect the investments of Kingfish for use in
conjunction with the NGFS scenarios. Fisher
Funds is satisfied that the FSC narratives have
been suitably stated for use by financial services
CREs. These narratives are underpinned by
robust analysis and are therefore suitable (as
adjusted for Fisher Funds) to use in this climate
statement.
Use of FSC narratives supports comparable and
consistent disclosures in the industry which
Fisher Funds also wishes to support to the
extent appropriate. The Portfolio Manager has
applied these narratives when reviewing and
assessing the outputs from the ISS ESG Climate
Impact Reports and has used this knowledge
when rating climate impacts on Kingfish.
Scenario 1: Orderly (1.5°C)
The Orderly scenario represents collective action
towards a low carbon global economy if the
earth’s temperature rises by 1.5 degrees Celsius.
In this scenario, there are steady and constant
societal changes related to technology, policy
and behaviour to support the transition to a
lower emissions economy. This is matched by an
increasing carbon price that reinforces low carbon
behaviour change. The coordinated and timely
action around the world to curb greenhouse gases
prevents the worst predicted impacts of climate
change, however, the long-term chronic impacts
from historic greenhouse gas (GHG) emissions still
occur, although not severely.
This scenario represents a medium level of
transition risk and a low level of physical risk
compared with the other scenarios.
Scenario 2: Too Little Too Late (>2°C)
The Too Little Too Late scenario represents a misaligned and
delayed transition to a low carbon economy between different
parts of the world if the earth’s temperature rises by more than 2
degrees Celsius. In this scenario, some countries are early movers
on the transition to a low emissions economy, introducing policy
that brings about net zero emissions by 2050. In other parts of the
world, however, there is very little action towards a low emissions
future with fossil fuelled development continuing throughout much
of the remaining first half of the century. From mid-century, global
efforts to address climate change begin to align and exceed those
by the early movers.
Large increases in carbon price will drive a rapid improvement in
low emissions technology efficacy and uptake. This shift is partly
driven by the increasing evidence and awareness of the social,
economic and environmental degradation caused by a continued
increase in fossil fuelled development. Despite making a concerted
effort to reduce emissions and move to a low emissions economy
at mid-century, the changes come too late to prevent wide ranging
acute and chronic physical climate impacts.
This scenario represents a high level of transition risk and a medium
level of physical risk compared with the other scenarios.
03 | Strategy
Chosen scenario to represent the
Orderly scenario
NGFS RM NZ — Net Zero*
Net Zero 2050 is an ambitious scenario
that limits global warming to 1.5°C through
stringent climate policies and innovation,
reaching net zero CO
2
emissions around
2050. Some jurisdictions such as the US, EU
and Japan reach net zero for all greenhouse
gases by this point. This scenario assumes
that ambitious climate policies are introduced
immediately. Carbon dioxide removal (CDR)
is used to accelerate the decarbonisation but
kept to the minimum possible and broadly
in line with sustainable levels of bioenergy
production. Net CO
2
emissions reach zero
around 2050, giving at least a 50% chance of
limiting global warming to below 1.5°C by the
end of the century, with no or low overshoot
(<0.1°C) of 1.5°C in earlier years. Physical risks
are relatively low but transition risks are high.
Chosen scenario to represent the Too Little Too
Late Scenario:
NGFS RM NDC — Nationally Determined Contributions (NDCs)*
NDCs include all pledged policies even if not yet implemented.
This scenario assumes that the moderate and heterogeneous
climate ambition reflected in the conditional NDCs at the
beginning of 2021 continues over the 21st century (low
transition risks). Emissions decline but lead nonetheless to
2.6°C of warming associated with moderate to severe physical
risks. Transition risks are relatively low.
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Climate Statement
2829Climate Statement
03 | Strategy
Scenario 3: Hothouse (>3°C)
This scenario represents minimal action towards a low carbon
global transition if the earth’s temperature rises by more than 3
degrees Celsius. Despite increasing levels of social, economic and
environmental degradation, there is little shift in social and political
traction towards a low emissions future. As a result, there is little
behaviour change and a lack of low carbon emissions technology
development. This leads to a continued and increasing level of
fossil fuel use, strong globalisation, increasing consumption and
materialism.
The impact of these activities continues to drive emissions higher
throughout the remaining 21st century leading to significant
materialisation of acute and chronic physical risks. In the first half
of the 21st century, this physical risk sees increasing severity of
extreme weather which is accompanied by rising sea levels in the
latter half of the 21st century. This threatens coastal developments
worldwide, placing pressure on global relations.
This scenario represents a low transition risk and a high level of
physical risk compared with the other scenarios.
Chosen scenario to represent the Hothouse scenario
NGFS RM CP — Current Policies*
Current Policies assumes that only currently implemented
policies are preserved, leading to high physical risks.
Emissions grow until 2080 leading to about 3°C of warming
and severe physical risks. This includes irreversible changes
like higher sea level rise. This scenario can help central banks
and supervisors consider the long-term physical risks to the
economy and financial system if we continue on our current
path to a “hothouse world”.
Climate-related risks
and impacts
*Source: www.ngfs.net/ngfs-scenarios-portal/explore
Fisher Funds has assessed physical and transition
impacts on the Kingfish portfolio. This included
an assessment of how well prepared the assets
in the portfolio are to respond to climate change
impacts across each of the time horizons and
each scenario described in the previous section.
The work identified a variety of physical risks
to which Kingfish is exposed across different
sectors and geographies. Changing climate and
weather patterns can impact the physical risk
levels of an entity. These, among other factors,
vary depending on the entity’s financial profile,
including where the entity operates, the total
value of its assets, and in which countries the
entity generates its revenue.
The following table sets out the significant
physical risks identified through the assessment
process. The table provides a matrix of risks
and impacts—the physical climate risk (e.g.
flood, wildfire), the risk impact (e.g. operational,
financial, reputational), the relevant investment
sector (e.g. industrials, consumer staples), and the
percentage of the fund exposed to the physical
risk. Current impact and anticipated impacts
have also been assessed and documented. No
transition risks of statistical relevance were
identified.
The assessment process involved the following
steps:
1. Initially the ISS ESG physical risk assessment
methodology was used to assess the potential
change in an entity’s financial risk at both an
operational and market level.
a. Operational impacts were quantified by
considering the costs of repairing assets
damaged by tropical cyclones, river floods,
coastal floods and wildfires, and the loss of
income due to the associated organisational
interruptions. The analysis also considered
the impact of heat stress on labour
productivity and the resulting potential
increase in production costs.
b. Market impacts were quantified by
estimating the revenue at risk due to
nationwide effects on country gross
domestic products (GDPs) due to the
combined impact of droughts and heat
stress on agricultural productivity, decrease
in labour productivity, and human health
effects. The assessment assumed a one-to-
one relationship between GDP changes and
changes in an entity’s revenue.
2. The outputs of the ISS ESG solution were then
reviewed by the IMT who rated the identified
physical risk as very low, low, medium or high
for each of the scenario narratives and time
horizons described in the previous section.

Note that potential financial impacts are not
disclosed because Kingfish has relied on adoption
provision 2 NZ CS 2 (anticipated financial impacts)
for this reporting period. However, in the following
metrics section, current and anticipated portfolio
financial value at risk (VaR) emerging from the
relevant issuing entities’ exposure to physical risks
is set out.
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Climate Statement
3031Climate Statement
Key
Risk levelVery lowLowMediumHigh
RiskTypeRegion
Investment
sectors
impacted
% of fund
exposed
to sector
risk
Current
impacts
Anticipated
impacts
Sector risk - Assessment over time
horizons and scenarios
Time
horizon
Orderly
Too
Little
Too
late
Hothouse
Floods
and tropical
cyclones
Operational,
asset
concentration
risk and
reputational
risk, credit risk
New
Zealand
& global
Industrials11.1%In part due to their coastal and low-lying
locations, ports and airports are currently
exposed to extreme weather from climate-
related events which may cause disruptions
or risk to their operations and associated
consequential impacts.
An increase in frequency and severity of floods and tropical
cyclones may impact operations due to impacts on business operations
and supply chains more broadly. For example, freight networks could be
impacted and transported volumes reduced, or key operating locations may
be unable to operate to serve customers. This may result in impact to the
reputation of companies if stock delivery is impacted. These risks may also
impact customers and suppliers of industrial companies causing disruption.
This may result in customer retention issues, reduced revenue and/or
profitability, negatively impacting returns.
Short
Medium
Long
Overall
(combination
of droughts,
floods, tropical
cyclones, and
heat stress)
Operational,
asset
concentration
risk and
reputational risk
New
Zealand
& global
Consumer
staples
4.9%Businesses with exposure to soft commodities
inputs (such as raw milk and grapes) see
variability relating to these due to climate-
related variations, which may impact changes
in yield, supply, demand and pricing.
An increase in frequency and severity of droughts, floods, tropical cyclones
or heat stress causes risks including the availability and cost of food or
raw material inputs, impacting consumer related sectors. This may result
in reduced revenue and/or profitability, and variability in share price,
negatively impacting returns.
Short
Medium
Long
Overall
(combination
of droughts,
floods,
and tropical
cyclones)
Operational,
asset
concentration
risk and
reputational
risk, credit risk
New
Zealand
Utilites8.7%Utilities (such as hydro, wind, and thermal
generators) see variability in generation output
and customer demand due to climate-related
variations, such as regional rainfall and wind,
plus temperature which can drive demand
through factors such as the requirement for
heating or air conditioning.
An increase in frequency and severity of droughts, floods, or tropical
cyclones may result in increased electricity price volatility, increased
regulatory scrutiny, or even power blackouts from lack of electricity
generation or transmission/distribution. Both operating facilities or essential
infrastructure could be impacted. This may result in customer retention
issues, reduced revenue and/or profitability, and variability in share price,
negatively impacting returns.
Short
Medium
Long
Overall
(combination
of droughts,
floods,
and tropical
cyclones)
Operational,
asset
concentration
risk and
reputational
risk, credit risk
New
Zealand
& global
Health care22.5%Retirement village operators can see impacts
from localised climate-related events, which
may require them to take precautions to
protect residents and their villages. This may
incur additional costs or impact the resident
experience. These events also have potential
to disrupt health care supply chains which may
incur cost or impact delivery of products and
services to customers.
An increase in frequency and severity of droughts, floods, or tropical
cyclones may impact the delivery of goods or services to customers.
For example, this could occur though the unavailability of assets and/or
workforce and lack of supplies. This may result in customer retention issues,
reduced revenue and/or profitability, or devaluation of assets, negatively
impacting returns.
Short
Medium
Long
Overall
(combination
of droughts,
floods,
and tropical
cyclones)
Operational,
asset
concentration
risk and
reputational
risk, credit risk
New
Zealand
& global
Information
technology
4.5%There has been limited impact on Information
Technology companies from climate-related
risks. However, localised events can impact
employees and customers, incrementally
impacting productivity and service delivery
and potentially incurring additional costs.
An increase in frequency and severity of droughts, river floods, or tropical
cyclones may possibly impact the delivery of services to customers or
customers themselves. This could impact customer retention, reduced
revenue and/or profitability, negatively impacting returns.
Short
Medium
Long
Physical risk heat map
03 | Strategy
Figure 5: Physical risk heat map analysis at a sector level
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Climate Statement
3233Climate Statement
Opportunities
Physical and transition climate opportunities were
initially developed in an internal workshop and
then developed into opportunity statements by
a member of the Responsible Investment Team
(RI Team). The Portfolio Manager then assessed
Kingfish to identify the opportunity statements
that best represented Kingfish holdings at
that point in time. Opportunity statements are
intended to enable the IMT to develop their
internal capacity to better understand and
prepare for the uncertain future impacts of
climate change.
Resource efficiency
By implementing resource-efficient solutions
across these production and distribution
processes, buildings, machinery and appliances,
and transport/mobility, a company may have
an opportunity to reduce operating costs and
improve environmental impact. This includes
a focus on energy efficiency as well as broader
initiatives related to materials, water and waste
management.
By embracing and leveraging technological
innovation to transition towards resource-efficient
solutions, an entity may have the opportunity to
create resource efficiency. This could include
developing efficient heating systems and circular
economy solutions, making advances in LED
lighting technology, industrial motor technology,
retrofitting buildings, employing geothermal
power, offering water usage and treatment
solutions, and developing electric vehicles.
Energy source
Embracing alternative energy sources, such as
solar, wind and geothermal power, may provide
an opportunity to reduce reliance on fossil fuels
and mitigate potential greenhouse gas emissions.
This may benefit entities not only from a
reputation perspective but also potentially provide
cost savings due to an increase in the cost of
traditional energy sources.
Investing in renewable energy sources provides an
opportunity to achieve a more sustainable future,
given the trend towards increased investment
in renewable energy capacity over fossil fuel
generation.
Products and services
Collaborating with suppliers and partners to
establish sustainable sourcing practices and
promote responsible production across the supply
chain may provide an opportunity to be aligned
with international sustainability requirements
— European Union (EU) legislation Corporate
Sustainability Reporting Directive (CSRD) — and
may open access to European markets.
Agriculture
By embracing technological innovations, such
as climate-resilient crop varieties and precision
agriculture technologies, the agriculture sector
could adapt to changing climate conditions,
ensure food security and enhance an entity’s
reputation.
Consumer staples
By promoting sustainable practices, companies
may improve their reputation and attract new
customers. This enables companies to improve
returns to investors.
Transportation
Accelerating the adoption of low-emission and
sustainable solutions, such as electric vehicles,
may help an entity meet their regulatory
requirements, reduce greenhouse gas emissions,
and enhance the industry’s reputation. This could
enable organisations to enhance their reputation
and attract socially responsible investors and
customers.
Markets
Promoting sustainable investments and financing
mechanisms, such as green bonds and low-
emission energy production, may facilitate
investment in environmentally-responsible
projects and capture new market opportunities
within the broader framework of the transition
to a low-carbon economy. This can enhance
an entity’s reputation and attract socially
responsible investors and customers.
Investing in sustainable infrastructure, such
as energy-efficient buildings and renewable
energy sources, may create new opportunities
for businesses and facilitate sustainable
economic growth.
Resilience
Developing adaptive capacity may create an
opportunity to respond to climate change by
improving efficiency, designing new production
processes, and developing new products,
leading to enhanced competitiveness, risk
management and business continuity.
03 | Strategy
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35Climate Statement
Photo: Rebecca Nolan
Risk management
This section describes how Fisher
Funds identifies, assesses and manages
climate-related risks including how these
processes are integrated into existing risk
management frameworks.
04
| Risk management
Climate risk assessment framework ................................................36
Identifying and assessing risk ..........................................................37
Managing investments’ climate risk ................................................39
Fisher Funds’ responsible investment approach ............................40
Risk management at Fisher Funds ..................................................41
Risk management at Kingfish...........................................................41
04
Risk management
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Climate Statement
3637Climate Statement
Photo: Sabrina Qi
Climate risk
assessment framework
ISS ESG Quantitative
Risk Assessment
Using the current and
anticipated quantitative analysis
on the Portfolio from ISS ESG
Material
Climate
Risk and
Opportunities
Entity Scenario
Narratives
Taken from the
NGFS scenarios
Fisher Funds
Qualitative Risk
Assessment
Performed by IMT
outlined in more detail on
the next page
04
| Risk management
Identifying and assessing risk
Figure 6: Fisher Funds’ climate risk assessment framework
Kingfish agreed a climate risk assessment in the year ending 31
March 2024. Kingfish will review its climate risk and opportunity
assessment annually and will also review the scope of the climate
risk assessment.
Fisher Funds manages investment portfolios across multiple asset
classes. Fisher Funds has a process for identifying a range of
investment risks, including climate-related risks.
To ensure a comprehensive assessment of climate risks and
opportunities across its diverse holdings, Fisher Funds partnered
with ISS ESG, a global provider of environmental, social and
governance data and analysis. This collaboration leverages
expertise to conduct quantitative risk assessments across all
investment portfolios.
In preparation for the climate-related disclosure in 2023 and 2024,
a standalone assessment of climate-related risks, and opportunities,
was developed. See figure 6: Fisher Funds’ climate risk assessment
framework (CRAF).
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Climate Statement
3839Climate Statement
Managing investments’ climate risk
Following the climate risk assessment process there were no
remedial actions, that is, alteration of investment strategy or exiting
positions. All climate risks identified will continue to be monitored.
The monitoring will be done by the RI Team and the Portfolio
Manager and will be conducted annually.
Fisher Funds manages risk, including climate risk, in Kingfish by
selecting which companies to invest in and the proportion of
securities to hold in those companies. Refer to the Strategy section
which outlines the investment selection process.
Fisher Funds’ responsible investment policy is also followed as part
of the investment selection approach for Kingfish. It also sets out
the criteria which, when met, excludes an entity from Fisher Funds’
investable universe.
A summary of the Fisher Funds responsible investment approach
is set out in figure 7. The Responsible Investment Policy is available
on the Fisher Funds website.
Fisher Funds may exercise voting rights on behalf of investors
in relation to any entity that the portfolio invests in. This means
Fisher Funds can vote (known as proxy voting) on shareholders’
resolutions. These resolutions may relate to an entity’s risk
management framework or their approach to mitigating climate
impacts in their business or setting climate metrics and targets for it
to achieve over a period. In this way Fisher Funds can use its vote to
support an entity’s stance on climate risk management.
04
| Risk management
The identification and assessment of climate
risks have largely been aligned to the quantitative
approach carried out by ISS ESG (see figure 6).
ISS ESG has methodologies that use the data to
assess physical and transition risks in a portfolio.
There are limits to the data and analysis that ISS
ESG provide, however ISS ESG is continuously
improving their methodologies and ESG data set
globally.
Fisher Funds worked with ISS ESG to understand
the data in detail, engaging with the ISS ESG
team and asking questions throughout the risk
assessment process. ISS ESG can identify the
relative size of the risks within an investment
portfolio, which is important for assessing overall
investment portfolio risk. See Appendix 2 for a
detailed description of the ISS ESG methodology.
All companies held in Kingfish as at 31 March 2024
were included in the ISS ESG quantitative risk
assessment.
The internal operations of Kingfish as an LIC and
the internal operations of Fisher Funds were not
included. Upstream and downstream operations
of Kingfish and Fisher Funds were not included.
It is important to note that the accuracy and
coverage of any quantitative risk assessment
is limited by the quality of data available. For
example, sometimes data may not be available or
there may be a significant gap between the date
data is reported by an entity and the date analysis
and reporting is undertaken. For Kingfish, Fisher
Funds is satisfied that a quantitative assessment
could be carried out notwithstanding the data
limitations outlined in the Metrics section. Data
and qualitative information for entities in the
portfolio are expected to improve over time.
The quantitative assessment by ISS ESG was then
supplemented by a qualitative review by the IMT,
which included the Portfolio Manager for Kingfish,
the Chief Investment Officer, the Responsible
Investment Specialist and external consultants
at Deloitte. An important part of this process was
to understand the impact of the material risks
identified in the ISS ESG reports and to overlay
the in-house knowledge of the IMT. For example,
where the ISS ESG reports identified droughts
and river floods as key hazards, the IMT discussed
and assessed how those risks could impact the
companies within the portfolio.
The RI Team and external consultants at Deloitte
identified the impact of the ISS ESG risks in
different time horizons and assessed the risks in
these relevant scenarios. The IMT then reviewed
the output of this work.
Fisher Funds’ process and collaboration with
ISS ESG identified potential anticipated future
impacts of climate change on Kingfish through
physical risks (refer to the Strategy section). This
process will evolve and improve over time.
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04
| Risk management
Fisher Funds’ responsible
investment approach
1
Avoid the
Bad
Fisher Funds will not invest in companies that produce goods or services that can’t
be used responsibly or that cause widespread harm.
This means Fisher Funds won’t invest in companies:
•that produce core components or systems used in weapons. This includes, but
is not limited to, cluster munitions, landmines, chemical and nuclear weapons
•that own proved or probable fossil fuels reserves and revenue share from
exploration and extraction of fossil fuels, excluding metallurgical coal, of 15%
or more; or has its primary business activity in any of the following subsectors:
integrated oil and gas, crude oil producers, offshore drilling and other services,
oil and gas equipment and services, oil and gas drilling, oil and gas exploration
and production, coal (excluding metallurgical coal) and consumable fuels
•that manufacture cigarettes (including e-cigarettes), or other tobacco
related products
•where their core business includes operating gambling establishments, or the
manufacture of specialised hardware or software used exclusively for gambling
•involved in the hunting of whales and processing of whale meat
•that have exhibited unacceptable corporate behaviour that Fisher Funds regards
as a fundamental breakdown of the integrity of the business. This includes
but is not limited to human rights abuses, and abuse and degradation of the
environment.
2
Embrace
the Good
Once Fisher Funds has avoided the bad, it then seeks to embrace the good.
A key element in Fisher Funds’ in-depth research process is a thorough
understanding of how a company works with its stakeholders, how it treats the
environment and how it manages its governance responsibilities.
Fisher Funds’ research is supplemented with insights from leading global ESG data
providers, giving Fisher Funds a 360-degree view of an entity and its impact on
ESG factors.
Viewing a company through this lens helps Fisher Funds make better investment
decisions.
3
Promote
Change
This third element in Fisher Funds’ responsible investing process is promoting
change within companies where we have a direct relationship.
To promote positive change Fisher Funds can use voting rights to leverage its
relationship with entities to uphold Fisher Fund’s ESG approach.
Climate Statement
40
Photo: Rebekah Swan
Risk management at
Fisher Funds
Figure 7: Responsible investment policy
Risk management at
Kingfish
Kingfish, as an LIC, has risk management
processes. These are detailed in the annual report
for the year ending 31 March 2024. Climate risk
was not considered in any formal enterprise risk
committees or processes at Kingfish. Climate
risk at enterprise level is tied to the operations of
Fisher Funds as the manager.
Kingfish will review whether it needs to update its
risk management process to incorporate climate
risk in the next financial year.
Fisher Funds (as an operating entity) has an
enterprise risk governance policy and risk
management framework, operates a business risk
committee at management level, and provides
enterprise risk reporting to the Fisher Funds Board
and ARC. The Fisher Funds’ enterprise risk heat
chart records climate change as an entity-level
risk. Fisher Funds continues to evolve its risk
management processes and responsibilities at an
enterprise level.
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05 | Metrics & targets
43Climate Statement
Photo: Jin Wan
Metrics and targets
This section details key metrics and
targets for Kingfish, including any
assumptions and comments on
methodologies. These metrics and
targets have been endorsed by the
Fisher Funds ESG Committee and
approved by the Kingfish Board.
Guidance...........................................................................................44
Kingfish summary .............................................................................46
Metrics ..............................................................................................47
Target alignment ..............................................................................50
Targets ..............................................................................................54
05
Metrics and targets
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Climate Statement
4445Climate Statement
Incentives and remuneration
Fisher Funds provides all necessary resources
and staff for Kingfish (other than the Board and its
committees). Kingfish does not employ any staff.
Fisher Funds did not incorporate specific climate-
related performance metrics into its remuneration
policies during the period. As a result, no
management remuneration was linked to climate-
related risks and opportunities in the period.
Data limitations
The disclosures made about Kingfish’s GHG
emissions have not been the subject of an
assurance engagement, as this is not required for
first climate statements (refer to section 461ZH
Financial Markets Conduct Act 2013). However,
Fisher Funds obtained an independent review of
the GHG emissions and other data provided by
ISS ESG, in order to ascertain the quality of that
data. A sample of emissions data for relevant
investments was tested, including the underlying
data, calculations and methodology used.
This testing identified several material issues.
For example, underlying data was not always
calculated in line with Partnership for Carbon
Accounting Financials (PCAF) methodology
(considered the best practise global standardised
framework to measure and report emissions),
certain publicly available data was excluded on
the basis that it was unreliable where the basis
for that exclusion did not appear reasonable,
and where proprietary modelling was used, the
model was not shared on the basis of intellectual
property concerns which meant accuracy could
not be assessed. Given these findings, scope 3
emissions have not been disclosed in this climate
statement, as permitted by adoption provision
4 of the NZ CS 2. Scope 1 and 2 emissions have
been disclosed as required, however these
must be considered in light of the limitations
and quality issues outlined above and may be
materially inaccurate. Emission statements will be
restated in future climate statements if material
variances are subsequently detected. Fisher
Funds expects that data quality will improve as the
disclosure regime matures.
Metrics
The metrics detailed in this section are provided
by ISS ESG and are subject to the limitations as
set out below and assumptions noted by ISS ESG
in their methodology documents. For more detail
on these assumptions see Appendix 2.
The information about companies within Kingfish
cannot be relied on as reflective of their real-time
position as at 31 March 2024. The passage of time
between the date an entity reports its data, the
date ISS ESG collects that data and the end date
of the reporting period for this climate statement
can be significant. ISS ESG works to ensure data
is as up to date as possible but is limited by when
entities provide their data and if data is available.
Emissions
ISS ESG’s solution was used to calculate the emissions profile
of Kingfish.
NZ CS 1 requires certain disclosures in the climate statements to
help readers understand how the disclosed emissions data has been
calculated and facilitate like-for-like comparisons. These standards
assume the approach and sources are consistent. However, this is
not currently the case for investment vehicles like Kingfish because
the GHG emissions data is derived from information reported
by all the entities in which Kingfish is invested or from modelled
data. There is no consistency of approach between entities, and
modelling standards. This means that the metrics for each portfolio
consist of a blend of approaches and sources.
The ISS ESG solution calculated the emissions profile of Kingfish
using the ISS ESG proprietary methodology to measure the GHG
emissions (scope 1 and scope 2) as set out in this climate statement.
For the reasons explained above, the disclosures required by
NZ CS 1 (i.e. GHG emission calculation standards, consolidation
approach, and sources and exclusions) need to be qualified
as follows:
a. Standards: ISS ESG advised that the emissions data meets the
standards of the PCAF, however, Fisher Funds was not able to
verify this.
b. Consolidation approach: The entities in which Kingfish is invested
publish their GHG emissions data based on the consolidation
approach selected by that entity. As a result, no single
consolidation approach for aggregated GHG emissions across
Kingfish can be stated.
c. Sources: ISS ESG used a number of sources to determine
the emission factors and global warming potential (including
the Intergovernmental Panel on Climate Change (IPCC)
recommendations, and regional or country level factors),
depending on the information available for the entity in which
Kingfish invested. As a result, no single source can be stated.
d. Exclusion criteria: ISS ESG excluded data that was assessed
as unreliable. However, the specific exclusion sources and
underlying rationale were not disclosed to Fisher Funds due to
intellectual property considerations.
05 | Metrics & Targets
Guidance
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Climate Statement
4647Climate Statement
0
2000
4000
6000
8000
10000
Fund
Benchmark
Emissions exposure (tCO
2
e)
9,287
4,982
The Kingfish portfolio (based on underlying
holdings) emitted approximately 4,982 tonnes of
CO
2
from scope 1 and 2 emissions. This is a lower
emission profile than if Fisher Funds had invested
in the benchmark, which would have created an
emission profile of 9,287 tonnes of CO
2
.
Sector contributions to emissions (%)
Consumer staples
Health care
Industrials
Materials
6%
5%
46%
1%
In the Kingfish portfolio, 88% of the emissions
were created by holdings in the industrials and
utilities sectors.
Utilities
42%
Kingfish summary Metrics
Kingfish invests in shares in companies and is exposed to climate-
based risks, and opportunities, through the entities it invests in and
their value.
Investments are subject to many risks, including risks that are not
climate based, so it is important to consider climate-based risks in
a broader context. Fisher Funds wants to ensure that the Kingfish
Portfolio maintains an acceptable level of risk both in absolute terms
and relative to its benchmark.
Kingfish will inevitably see its climate-related risk profile change as
it buys and sells assets over time and as the issuing entities evolve.
This is in addition to the potential for physical and transition climate
risks changing, as the passage of time brings clarity on the future
state of the world (as contemplated by the climate scenarios used in
this report).
Fisher Funds and the Kingfish Board expect Kingfish’s companies
to recognise risks to their organisations and act in the most
appropriate way for the long-term benefit of their shareholders
and other stakeholders. In doing this, Fisher Funds’ expects they
will consider physical and transition climate risks as part of the
management of their organisations. As part of Fisher Funds ongoing
engagement with Kingfish’s portfolio companies, the manager
will selectively check that appropriate attention is being given to
climate-related risks and opportunities.
Fisher Funds has tried to bring some of these risk and opportunities
to life with the examples in the Case studies section.
05 | Metrics & Targets
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Climate Statement
4849Climate Statement
0
10
20
30
40
50
60
Portfolio coverage
Portfolio coverage
Portfolio not covered
0%
100%
As at 31 March 2024, 100% of Kingfish’s assets were covered by
ISS ESG’s Climate Impact Report.
The ISS ESG data captured is the financial information disclosed
publicly by these companies in the 2022 financial year and is made
available through ISS ESG in January 2024.
For every million invested, what is my
carbon footprint?
For the Kingfish portfolio for every $1 million
invested, the relative carbon footprint
(emissions exposure) as calculated by ISS ESG
for the base year is 10.99 tonnes of CO
2
(tCO
2
e),
below the benchmark which has a carbon
footprint of 20.49 tCO
2
e.
What is the carbon intensity of the
portfolio?
The weighted average carbon intensity
(WACI) for Kingfish as calculated by ISS ESG
is approximately 38.81 tonnes of CO
2
per unit
of revenue compared with the benchmark at
approximately 51.93 tonnes of CO
2
per unit
of revenue.
By this measure, the Kingfish portfolio has less
carbon intensity than the benchmark.
Key carbon metrics
Relative
carbon footprint
(tCO
2
e/Invested)
Weighted average
carbon intensity
(tCO
2
e/Revenue)
10.99
20.49
38.81
51.93
Fund
Benchmark
05 | Metrics & Targets
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Photo: Rebekah Swan
Climate Statement
50
0
10
20
30
40
50
60
70
80
90
100
Target alignment
Why targets matter
To assess where entities are relative to their targets there are several
metrics that can be looked at including science based targets
(SBTs). The more detailed the target setting, the closer the company
will move towards alignment.
Science based targets
SBTs are a way that can establish a company’s commitment to
disclosing and reducing its greenhouse gas emissions. When
companies set an SBT it needs to be independently verified. Setting
these targets also shows the company’s commitment to reducing
targets by 2050.
For Kingfish, 69% of the portfolio’s value is committed to such a
goal via an approved SBT (52% by portfolio value), a committed SBT
(11%), or an ambitious target (6%). However, 22% of the companies
in Kingfish do not have an emissions reduction target.
22%
9%
6%
11%
52%
FundBenchmark
12%
10%
11%
12%
55%
No target
Non-ambitious SBT
Ambitious SBT
Committed SBT
Approved SBT
Portfolio transition value at risk
As the global economy decarbonises in line with
pledges and targets, the level of transition risks and
opportunities grow. When evaluating the assets
vulnerable to transition risk from a whole-of-portfolio
perspective, portfolio transition value at risk (TVaR)
for transition risk is a useful metric. This is a measure
of the potential loss that an asset might experience.
For Kingfish the portfolio TVaR is around -3% of the
portfolio value based on the 2050 scenario. Of the
portfolio’s TVaR, the utilities and industrials sectors
are the major contributors with 82% and 9% of
portfolio TVaR respectively.
Portfolio TVaR of approximately -3% is lower than
the benchmark at approximately -2%. The size
of these climate risks out to 2050 are relatively
small compared with other risks faced by portfolio
companies such as technological disruption,
competition and regulation.
05 | Metrics & Targets
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Climate Statement
52
Portfolio value at risk
As at 31 March 2024, the assets in the portfolio
are exposed to different natural hazards in
different geographies. When evaluating the assets
vulnerable to physical climate risk from a whole-
of-portfolio perspective, the portfolio value at risk
(VaR) is a useful metric. This is a measure of the
potential loss that the assets in the portfolio may
collectively experience.
For Kingfish, the portfolio VaR is approximately
0.7% of assets under management, which is
marginally above the S&P/NZX 50 benchmark at
0.6%. Of the portfolio’s VaR, the health care and
industrial companies are the major contributors
with 75% and 14% of portfolio VaR respectively.
Assets aligned with climate-related
opportunities
A way to assess a fund’s exposure to climate
transition risks and identify opportunities, is to
look at the commitment of the entities in which
it invests, to transition and their proven ability to
earn revenues from ‘green’ products or services.
Green revenues are seen as contributing positively
towards climate action and brown revenues are
seen as being obstructive to climate action.
As at 31 March 2024, the percentage of assets in
the Kingfish that aligned with green activities was
4% and in contrast 19% was derived from brown
revenues (as calculated by ISS ESG).
Internal emissions price
Fisher Funds does not use an internal emissions
price due to the evolving nature of the industry
frameworks.
05 | Metrics & Targets
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55Climate Statement
Targets
Fisher Funds and the Kingfish Board have chosen
targets that will assist the management of
Kingfish, and enhance Fisher Funds’ investment
approach and support the Kingfish’s investment
objectives.
In the Metrics section, Fisher Funds has provided a
description of Kingfish’s metrics. This establishes
a baseline for comparison in future climate
statements.
Fisher Funds has used aspects of the Net Zero
Investment Framework (NZIF) when setting these
metrics and targets, given it is the most widely
used framework.
Fisher Funds has taken a 2-pronged approach to establishing the
metrics and setting the targets.
The first is to assess and manage. This may enable Fisher Funds to
better understand the climate risks and opportunities over time.
In addition, the ongoing better disclosure from entities and more
widely adopted climate-related disclosure policy settings globally,
will allow Fisher Funds to better assess the climate strategies of the
entities in which it invests.
The second is to engage as an active investor. Engagement is a big
part of Fisher Funds’ investment and stewardship approach.
Engagement outcomes are not linear, take time to conduct and
to see results. In time, Fisher Funds expects to see improvements
being reported in the percentage of companies that have SBTs.
Fisher Funds would also like to see an increased awareness of
risks and opportunities by entities in which it invests. Fisher
Funds acknowledges that there are other influencing factors that
contribute to this, for example, changes in policy settings in New
Zealand and globally. In future climate statements Fisher Funds will
disclose and target an increase in the percentage of companies in
the portfolio that have SBTs.
05 | Metrics & Targets
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Climate Statement
5657Climate Statement
Target scorecard
The targets detailed in this
section have been chosen by
analysing the data provided by
ISS ESG. This data is subject
to the limitations set out in the
Metrics section and assumptions
noted by ISS ESG in their
methodology documents.
For more detail on these
assumptions see Appendix 2.
The base year metrics are taken
as at 31 March 2024, and are not
reflective of the real-time position
of each entity in Kingfish.
TargetTimeframeInterim targets
Timeframe
of target
Base
year
Base year
metric
Description
Science Based
Targets (SBT) for
Kingfish compared
with the benchmark
AnnuallyDisclose annually how the metrics
change year on year, showing the
commitment percentages to SBTs as
defined by the base year metric.
Fisher Funds will look to
engage with the upper
quartile of companies as
defined by Fisher Funds
in the highest emitting
sectors that do not have
any targets.
2024
SBTs
69% of the portfolio’s value
is committed to a goal via an
approved SBT (52% by portfolio
value), a committed SBT (11%), or
an ambitious target (6%).
Engagement with entities
Base year is zero.
Fisher Funds will monitor these
metrics and will provide a description
of the movement year on year.
This will be reported on in future
climate statements against the base
year metric.
05 | Metrics & Targets
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59Climate Statement
06
|
Case studies
Contact Energy ................................................................................60
Summerset .......................................................................................62
Case studies
06
Case studies
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61Climate Statement
06 | Case studies
Contact Energy
Electricity, gas and broadband provider

Contact’s strategy is to provide electricity to
New Zealanders, including leading the country’s
decarbonisation.
Contact’s ambitions are to achieve net zero
emissions by 2035 (scopes 1 and 2) in an
orderly manner, ensuring security of supply and
affordability to New Zealanders.
Performance was affected by gas supply
challenges early in 2022 and the impacts of
extreme hydrology which led to volatile short-
term wholesale electricity pricing.
Contact has physical risks that could impact its
strategy over the short, medium and long term.
Some of these examples include:
•changes to hydro flow
•changes in regulation, which could impact
access to water
•increased risk of erosion
•increased risk of wildfires
•stormwater capacity issues from extreme
weather events
•over the medium term, changes in total ‘cold’
and increased ‘hot’ days
•health and safety and wellbeing issues for
people working in warmer conditions
•increased competition for natural resources
•over the long term, new technology may make
current generation redundant and impact
demand significantly.
Examples of how Contact is tackling these challenges include:
•Contact substantially progressed construction of its Tauhara
geothermal power station to near practical completion.
•Tauhara is expected to begin selling electricity into the national
grid from the second half of 2024 with capacity of around 174
megawatts (when at full capacity) providing approximately
1,420 gigawatt hours annually. This is enough to power around
200,000 households.
•Tauhara is expected to reduce carbon emissions in New Zealand
by around 500,000 tonnes per year as fossil fuel generation is
displaced (shut down or put on standby). This is equivalent to
removing over 220,000 petrol cars from New Zealand roads.
•Tauhara is expected to reduce Contact’s exposure to possible
climate risks in the future. Geothermal power runs nearly
continuously and so its availability is not subject to when the rain
falls, wind blows and sun shines.
It also means that Contact will be able to retire its Taranaki
combined cycle power plant, its remaining baseload gas generation
asset, with closure expected around the end of 2024. Planned
investments including batteries and flexible load management
solutions are expected to reduce Contact’s reliance on its remaining
gas ‘peaking generation’ over time (its only remaining non-
renewable generation assets).
Contact has continued to carefully manage existing operations
to optimise performance while simultaneously accelerating its
investment and decarbonisation. This includes over $1 billion of
renewable generation under construction, a significant pipeline of
further potential geothermal, wind, solar and battery investments,
and the retirement of thermal generation.
The future opportunities for the electricity sector, and Contact in
particular, to grow could be significant.
Source: Contact Energy — Investor centre
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Climate Statement
62
06 | Case studies
Summerset
Retirement villages
Summerset has many retirement villages spread
across New Zealand and is also beginning to build
and operate villages in Australia.
Summerset has embedded sustainability into
its business model and has developed a climate
action plan summarising how it is tackling the
challenge of decarbonisation and transition,
highlighting priorities and initiatives with targets.
Summerset’s challenges are mainly around the
physical risks where its villages are located and
include the retirement village assets themselves,
operational improvement and improving its new
build programme.
Summerset provides a good example of how
portfolio companies are exposed to and manage
climate-related risks.
In February 2023, Summerset was exposed to
the Cyclone Gabrielle extreme weather event.
This saw heavy rain, strong winds, river flooding
and landslides across much of New Zealand’s
North Island. This brought to life the extent of
the climate-related physical risks the company is
subject to, which may increase in the future.
Several villages were affected by Cyclone
Gabrielle to varying degrees, including the most
significant at its Te Awa (Napier) village. This
village lost power and communications and was
evacuated as a precaution. There was only minor
physical damage to the village but unexpected
additional costs of approximately $146,000 were
incurred.
As part of Summerset’s sustainability framework, one of its strategic
goals is to reduce their impact on the planet through efficiency
and innovation. The company’s focus includes reducing its carbon
footprint, reducing waste, improving energy efficiency, measuring
water intake, using sustainable design and construction practices and
embracing technology including solar.
Summerset has also committed to fulfilling sustainability-linked loans
in ongoing dementia certification and beds, 5% year-on-year reduction
in carbon intensity per square metre scopes 1, 2 and 3, and diversion
of construction waste to landfill.
Summerset achieved its first target to reduce carbon emissions by
5% per million dollars of revenue and exceeded that, achieving a 16%
reduction.
This new SBT gives Fisher Funds a way to measure the target, which
can be compared year on year.
Source: Environmental, social and governance reporting — Summerset
In terms of risk mitigation, Summerset conducts
comprehensive reviews of the locations and sites
before building its villages, to prevent selecting
sites that may be prone to risks from such events.
It was comforting to see that during Cyclone
Gabrielle and in the January 2023 Auckland floods
its sites did not experience material damage. The
company was also proactive in protecting and
caring for its residents.
Summerset has made the following commitments
with 2017 being its base year.
In 2023 Summerset produced 102,926 tonnes
of CO
2
e (scopes 1, 2 and 3). Summerset has
significant scope 1 and 2 emissions from
electricity and gas. A large portion of its demand
for electricity is not readily avoidable due
to operating care facilities that have energy
requirements to deliver a high level of care.
Similarly, gas is used for heating hot water,
cooking and providing laundry services which
are all core services when caring for the elderly.
Where infrastructure is available, it is exploring
options to transition from gas heating to
electricity.
Emissions intensity from gas used (tCO
2
e per
square metre of main building space) was 0.013 in
2017 compared with 0.011 in 2023.
Emissions intensity from fuel use (tCO
2
e
per village) was 9.77 in 2017 compared with
13.34 in 2023.
Emissions from waste per total residents and staff
(tCO
2
e per resident and staff member) were 0.116
in 2017 compared with 0.043 in 2023.
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65Climate Statement
07 | Appendices
Appendices
Appendix 1—NZ CS 2 adoption provisions used in this report .......66
Appendix 2—ISS ESG methods and assumptions ...........................67
07
Appendices
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Climate Statement
6667Climate Statement
07 | Appendices
Appendix 2
NZ CS 2 adoption provisions used in this report
To recognise that it may take time to develop the capability to
produce high-quality climate-related disclosures, and that some
disclosure requirements, by their nature, may require an exemption,
NZ CS 2 provides a limited number of adoption provisions from
the disclosure requirements in Aotearoa New Zealand Climate
Standards.
The table outlines the adoption provisions which have been used
for Kingfish.
Provision numberNZ CS 2 adoption provision
1Current financial impacts — of physical and
transition impacts identified
2Anticipated financial impacts — of climate-
related risks and opportunities reasonably
expected by the entity
3Transition planning progress — towards
developing transition plan aspects of strategy
4Scope 3 greenhouse gas (GHG) emissions —
disclosing gross emissions in metric tonnes
of carbon dioxide equivalent (CO
2
e) classified
as scope 3
5Comparatives for scope 3 GHG emissions —
comparative information for the immediately
preceding 2 reporting periods
6Comparatives for metrics — comparative
information for the immediately preceding 2
reporting periods
7Analysis of trends — analysis of the main
trends evident from a comparison of each
metric from previous reporting periods to the
current reporting period
Appendix 1
ISS ESG methods and assumptions
Fisher Funds subscribes to Institutional Shareholder Solutions (ISS)
ESG for climate information and analysis. ISS ESG is a world leading
provider of environmental, social and governance solutions for
asset owners, asset managers, hedge funds, and asset servicing
providers. ISS ESG solution provides climate data, analytics, and
bespoke services to help financial market participants understand,
measure and act on climate-related risks and opportunities across
all asset classes. ISS ESG platforms are capable of providing carbon
footprinting and climate risk and opportunity analysis across
portfolio assets.
ISS ESG takes an exhaustive approach to data collection, and
analysis and delivery to its clients. The ISS ESG methodologies
provide details about the underlying models used for estimating
non-disclosed data. The ISS ESG methodology documents the
use of estimated data within its various products and elaborates
the extent of estimated data, and therefore assists the clients in
identifying the uncertainties and limitations associated with the use
of this dataset.
ISS ESG methodology: www.issgovernance.com/esg/methodology-
information
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69Climate Statement
08 | Glossary
Glossary
TermDefinition
Base yearThe first financial year that a climate-related disclosure relates to. This is a
12-month period against which future metrics can be measured and provides a
historic point for comparison.
Brown and green revenuesThe brown revenue percentage gives the estimated proportion of the issuer's
revenue considered to be derived from products or services with significant or
limited obstruction to Sustainable Development Goal (SDG) 13 Climate Action.
The green revenue percentage gives the estimated proportion of the issuer’s
revenue considered to be derived from products or services with contributions
to SDG 13 Climate Action.
Delayed transition Delayed transition assumes global annual emissions do not decrease until
2030. Strong policies are then needed to limit warming to below 2°C. Negative
emissions are limited. This scenario assumes new climate policies are not
introduced until 2030 and the level of action differs across countries and regions
based on currently implemented policies, leading to a “fossil recovery” out
of the economic crisis brought about by COVID-19. The availability of carbon
dioxide removal (CDR) technologies is assumed to be low, pushing carbon
prices higher than in Net Zero 2050. As a result, emissions exceed the carbon
budget temporarily and decline more rapidly than in Well-below 2°C after 2030
to ensure a 67% chance of limiting global warming to below 2°C. This leads to
both higher transition and physical risks than the Net Zero 2050 and Below 2°C
scenarios.
IEA APS The International Energy Agency (IEA) Announced Pledges Scenario (APS)
illustrates the extent to which announced ambitions and targets can deliver the
emissions reductions needed to achieve Net Zero Emissions by 2050.
IEA Net Zero Emissions by 2050
The IEA Net Zero Emissions by 2050 scenario is a normative scenario that shows
a pathway for the global energy sector to achieve net zero CO
2
emissions by
2050, with advanced economies reaching net zero emissions in advance of
others. This scenario also meets key energy-related Sustainable Development
Goals (SDGs), particularly universal energy access by 2030 and major
improvements in air quality. It is consistent with limiting the global temperature
rise to 1.5°C (with at least a 50% probability) in line with emissions reductions
assessed in the Intergovernmental Panel on Climate Change (IPCC)’s Sixth
Assessment Report.
IEA STEPS The IEA Stated Policies Scenario (STEPS) provides a sector-by-sector evaluation
of the policies that have been put in place to reach stated goals and other
energy-related objectives, taking into account existing policies and measures
and also those that are under development.
NGFS Current Policies* Network for Greening the Financial System (NGFS) Current Policies assume that
only currently implemented policies are preserved, leading to high physical risks.
Emissions grow until 2080 leading to about 3°C of warming and severe physical
risks. This includes irreversible changes like higher sea level rise. This scenario
can help central banks and supervisors consider the long-term physical risks
to the economy and financial system if we continue on our current path to a
“hothouse world”.
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7071Climate Statement
08 | Glossary
TermDefinition
Scope 1 emissions Scope 1 covers emissions from sources that an organisation owns or controls
directly. For example, from burning fuel in a fleet of vehicles (if they are not
electrically powered).
Scope 2 emissions Scope 2 covers emissions that a company causes indirectly and come from
where the energy it purchases and uses is produced. For example, the emissions
caused when generating the electricity used in its buildings.
Scope 3 emissions
Scope 3 covers emissions that are not produced by the company itself and are
not the result of activities from assets owned or controlled by them, but by those
that it is indirectly responsible for up and down its value chain. An example
of this is when we buy, use and dispose of products from suppliers. Scope 3
emissions include all sources not within the scope 1 and 2 boundaries.
Source: www.nationalgrid.com/stories/energy-explained/what-are-scope-1-2-3-
carbon-emissions
Stated Policies Scenario (STEPS)STEPS provides a sector-by-sector evaluation of the policies that have been
put in place to reach stated goals and other energy-related objectives, taking
into account existing policies and measures and also those that are under
development.
tCO
2
e Tonnes (t) of carbon dioxide (CO
2
) equivalent (e). Carbon dioxide equivalent is a
standard unit for counting GHG emissions regardless of whether they are from
carbon dioxide or another gas, such as methane.
Transition value at risk (TVaR) TVaR measures the potential loss an asset might experience from future
decarbonisation costs and opportunities.
Upstream and downstream emissions Upstream emissions come from the production of a company’s products or
services.
Downstream emissions come from the products’ use and disposal.
Value at risk (VaR) VaR measures individual companies' exposure to physical risks. Physical risks
can have a financial impact on a company at both the operational and the
market level.
TermDefinition
NGFS RM* NGFS REMIND-MagPIE Model which is recommended by NGFS for policy and
decision-makers by focusing more on the economy and technologies in its
modeling.
NGFS NDCs* NGFS Nationally Determined Contributions (NDCs) include all pledged policies
even if not yet implemented. This scenario assumes that the moderate and
heterogeneous climate ambition reflected in the conditional NDCs at the
beginning of 2021 continues over the 21st century (low transition risks).
Emissions decline but lead nonetheless to 2.6°C of warming associated with
moderate to severe physical risks. Transition risks are relatively low.
NGFS Net Zero 2050* NGFS Net Zero 2050 is an ambitious scenario that limits global warming to
1.5°C through stringent climate policies and innovation, reaching net zero CO
2

emissions around 2050. Some jurisdictions such as the US, EU and Japan reach
net zero for all greenhouse gases by this point. This scenario assumes that
ambitious climate policies are introduced immediately. CDR is used to accelerate
decarbonisation but kept to the minimum possible and broadly in line with
sustainable levels of bioenergy production. Net CO
2
emissions reach zero around
2050, giving at least a 50% chance of limiting global warming to below 1.5°C by
the end of the century, with no or low overshoot (<0.1°C) of 1.5°C in earlier years.
Physical risks are relatively low but transition risks are high.
Overshoot Overshoot is the term used by the IPCC to describe scenarios in which a
specified global warming temperature level is exceeded — typically between 1.5
and 2°C — before returning to that level at some point in the future.
Science based targets (SBTs) SBTs are goals that organisations set to reduce their greenhouse gas (GHG)
emissions in line with the Paris Agreement to mitigate the worst effects of the
climate crisis. Ratified by more than 190 countries, the Paris Agreement aims to
limit the rise of global temperatures to well below 2°C above pre-industrial levels
while also striving for a limit of 1.5°C.
SBTs:
• No target — no clearly-defined GHG emission reduction targets are set by
the company.
• Non-ambitious target — a clearly-defined GHG emission reduction target
is set by the company, however the target is not aligned with the emission
reductions required to limit the global temperature increase to well below
2°C compared to pre-industrial levels.
• Ambitious target — a clearly-defined GHG emission reduction target is set
by the company that may be aligned with the emission reductions required
to limit the global temperature increase to well below 2°C compared to pre-
industrial levels.
• Committed SBT — an ambitious target has been set by the company. The
company has publicly committed to setting a SBT in line with the Science
Based Targets Initiative.
• Approved SBT — an ambitious target has been set by the company which
has been approved by the Science Based Targets Initiative
*Source: www.ngfs.net/ngfs-scenarios-portal/explore
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