The National Trust’s £1.6bn investment portfolio has lost millions in value after it was partly moved into the hands of eco-friendly wealth managers.
It comes as the charity races to hit net zero carbon emissions by 2030 and pledges to divest from fossil fuels.
Robeco Climate Global Credits Fund, which strives “to keep the global temperature rise to well below 2C” through its investments, was selected in 2021 to take on a portion of National Trust assets, which is worth 6.1pc.
But the fund has since seen the allocation tank by over £11m, 11.7pc, between March 2022 and February this year.
The Rotterdam-based firm was described by the National Trust’s chief financial officer as an “ideal partner” when it returned just under a percentage point of growth at the end of the last financial year.
The fund, which deals in nongovernmental bonds, boasts having the first ever investment strategy that is fully compliant with the 2015 Paris Agreement on climate change.
The eight-year-old treaty saw world leaders come together and agree to ideally keep temperature rises below an increase of 1.5C, for which a 50pc cut in global emissions would be needed by 2030, it was acknowledged.
But the bid to promote climate change targets while keeping a healthy balance sheet has since backfired and the National Trust’s investment interests managed by Robeco have become the worst performing in its portfolio.
Bloomberg’s benchmark for the bond market, which is used to measure the performance of the market, was said to be -10.4pc in the National Trust report, meaning Robeco fell short of expectations.
So-called ESG, or “environmental, sustainable and governance”, a catch-all for firms that pledge to support climate change targets, has performed poorly in recent years as global markets were rocked by the pandemic and Russia’s war in Ukraine.
The National Trust’s fortune is £1.5bn, down £49m in the year to February 28, 2023, after a number of its investments gave negative returns, its annual statement of accounts shows.
Other funds posting negative returns for the National Trust that were worse than expected included Newton Real Return Strategy, Nordea MA Strategy Fund, RBC Funds (Lux) – Vision Global Horizon Equity Fund and Ownership Capital Global Equity.
The charity’s annual accounts further revealed record spending of £179.6m for the conservation of historic buildings and collections it holds.
The 5.7 million members-strong organisation has been accused of driving a “woke” agenda and straying from its core mission “of looking after our heritage and countryside” by Restore Trust, a group seeking to shake up leadership of the National Trust.
A spokesman for the National Trust said: “The National Trust’s investment strategy, for its £1.5bn portfolio, is to seek long-term returns, and to achieve these through an investment strategy that is aligned with our values and charitable objectives including making a positive impact on the climate change crisis.”
He added: “No investment is free of risk but although certain investments may fall in value, investment return targets are delivered by the portfolio as a whole, rather than any one particular component and we assess each fund’s performance against a benchmark.
“Decisions to disinvest are taken with a long-term view and not in response to short-term fluctuations in value.”
A spokesman for Robeco said: “Institutional investors, such as the National Trust, build diversified investment strategies by investing in a range of assets and different investments. These portfolios will typically have a meaningful allocation to fixed income and bond markets.
“As is widely known, 2022 was a difficult year for bond markets across the globe, largely driven by the rising interest rates set by central banks, such as the Bank of England. Prices of bonds are inversely related to interest rates, so as interest rates rise, bond prices typically fall.
He added: “While the performance of the Robeco Climate Global Credits fund was down over 2022, this is in line with market expectations.
“Returns for the UK gilt and UK corporate bond markets have been worse during the same period, and this shows the benefit of Robeco’s globally diversified strategy. In addition, this Robeco fund invests in line with the climate goals of the 2015 Paris Agreement.
“By excluding fossil fuels the fund’s carbon intensity is meaningfully lower than the market, and going forward the fund will decarbonise further to help contribute to achieving the National Trust’s climate targets.”
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