Case study

One which looks beyond headline carbon intensity metrics or targets and analyses companies’ willingness – and ability – to meet the needs of the energy transition. This approach can identify opportunities that would be overlooked by an approach focused solely on a linear reduction in headline portfolio emissions.

One example of how we seek to analyse and then engage with a company on its Net Zero plans is Ryanair. The aviation industry is often discounted by Net Zero investors as too ‘dirty’ to invest in.

However, our analysis of and engagement with Ryanair led us to a different view. We believe that the aviation industry currently has a strong transition incentive but limited green solutions – represented on Figure 3 by high customer demand but low company capabilities. Within the sector, Ryanair is in our view amongst the best placed to address the required transition (Figure 4) – a measure sometimes ignored when focusing solely on a company’s existing emissions or targets.

Our engagement will focus on ensuring Ryanair embraces its leadership role in the aviation industry’s transition and does more to incentivise green innovation in the sector’s ecosystem – that is, shift itself up the y axis of Figure 4 in order to help propel the aviation industry along the x axis of Figure 3.

This could help to transform Ryanair from supposed climate villain to transition hero. It could also help us meet our goals of furthering the energy transition and managing climate risk, whilst profiting should the market reward the company's success.