Asset managers representing over $9 trillion of assets under management (AUM) today announced the launch of the Net Zero Asset Managers initiative. This is a leading group of global asset managers that commit to support the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5°C. They also commit to support investing aligned with net zero emissions by 2050 or sooner. Delivery of the commitment also includes prioritizing the achievement of real economy emissions reductions within the sectors and companies in which the asset managers invest.
As part of the initiative, asset manager signatories have committed to:
- Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management;
- Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner; and
- Review their interim target at least every five years, with a view to ratcheting up the proportion of AUM covered until 100% of assets are included.
The commitment in turn recognises “an urgent need to accelerate the transition towards global net zero emissions and for asset managers to play our part to help deliver the goals of the Paris Agreement and ensure a just transition.” A full version of the commitment statement adopted by signatories can be seen here.
Drawn from across the world, the initial 30 Net Zero Asset Managers signatories are: a.s.r. Asset Management, Anaxis Asset Management, Arisaig Partners, Asset Management One, ATLAS Infrastructure Partners, AXA Investment Managers, BMO Global Asset Management, Calvert Research and Management, CCLA Investment Management, Clean Energy Ventures, DWS, FAMA Investimentos, Fidelity International, Generation Investment Management LLP, GIB Asset Management, Handelsbanken Fonder AB, IFM Investors, Inherent Group LP, Kempen Capital Management, Legal & General Investment Management, M&G plc, New Forests Pty Ltc, Nordea Asset Management, Robeco, Sarasin & Partners LLP, Schroders, Swedbank Robur, UBS Asset Management, Wellington Management and WHEB.
Further commitments from other leading names in the sector are expected over coming months.
David Blood, Senior Partner, Generation Investment Management: “The Net Zero Asset Managers initiative represents a significant moment on the road to addressing the climate crisis. The transition to net zero will be the biggest transformation in economic history and we want to send a clear signal that there is simply no more time to waste. The opportunities to allocate capital to this transition over the coming years cannot be underestimated. Without the asset management industry on board, the goals set out in the Paris Agreement will be difficult to meet.”
Anne Richards, CEO, Fidelity International: “At Fidelity International, we recognise that climate change poses one of, if not the most, significant risks to the long-term proﬁtability and sustainability of companies, including our own. Following our commitment earlier this year to reduce our operational carbon emissions to net zero by 2040 and the publication of our first TCFD report this week, we are pleased to join the Net Zero Asset Managers initiative, working together with our peers to support and accelerate the transition towards global net zero emissions.”
Asoka Woehrmann, CEO, DWS: “These times call for leaders. The asset management industry plays a fundamental role in leading the way towards a net zero carbon economy and society. While DWS was an early mover in responsible investments, now is the time to take another bold step. We are committed to transparency and targets to progress the era of sustainability.”
Tony Davis, CEO & CIO, Inherent Group: “Inherent Group is pleased to join this critical initiative. Asset managers need to decarbonize their operations and their portfolios in order for society to meet the goals of the Paris Agreement. As a firm, we offset our carbon footprint and seek investments aligned with net zero emissions by 2050 or sooner. We encourage others to do so as well.”
Gilbert Van Hassel, CEO, Robeco: “It is clear from scientific reports about climate change and carbon emissions that society has to act now. We cannot solve big problems such as climate change and the rapid decline of biodiversity on our own. But what we can do is set a clear example for the broader industry, work together and encourage other financial institutions such as asset managers to follow suit. We have set this ambition with the conviction that investing is not only about creating wealth but also about contributing to well-being.”
Jean Hynes, Managing Partner and incoming CEO, Wellington: “In collaboration with Woodwell Climate Research Center, a leading climate science think tank, we have been researching the physical effects of climate change on capital markets and integrating those findings into our investment practices. This work has strengthened our conviction that climate science can inform our stewardship strategy and enhance the investment decisions we make on behalf of our clients. We strongly believe that engagement is a critical mechanism for helping companies appreciate the potential effects of the low-carbon transition on security valuations. As a large active manager, we will continue to work with companies to encourage net zero commitments and monitor their implementation.”
The launch of the Net Zero Asset Managers initiative comes ahead of the five-year anniversary of the Paris Agreement Saturday 12th December. A key ‘Climate Ambition Summit 2020’ event, co-hosted by the UK COP26 Presidency, the UN and France will mark the occasion and contribute to further climate action in the run up to next year’s COP26 climate conference.
The Net Zero Asset Managers initiative will be managed globally by six Founding Partner investor networks, namely: Asia Investor Group on Climate Change (AIGCC), CDP, Ceres, Investor Group on Climate Change (IGCC), Institutional Investors Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI). In turn, the initiative is endorsed by The Investor Agenda, of which the investor networks are all founding partners, along with UNEP FI.
Mindy Lubber, CEO and President of the sustainability nonprofit Ceres: “The transition to a net-zero emissions economy will be one of the biggest investment opportunities of the 21st Century. Asset managers around the world have a critical role to play in the transition that is already well underway, and today they have sent a powerful signal to global markets and across the broader investment community. We look forward to working with them every step of the way to becoming ‘net-zero’ asset managers, and welcoming other asset managers to our initiative in the coming months.”
To fulfil the requirements established by the initiative, signatories have also made a further nine commitments, including:
- Set interim targets for 2030, for assets to be managed in line with the net zero goal, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate Change (IPCC) special report on global warming of 1.5°C.
- Take account of portfolio Scope 1 and 2 emissions and, to the extent possible, material portfolio Scope 3 emissions;
- Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with the ambition for all assets under management to achieve net zero emissions by 2050 or sooner; and
- As required, create investment products aligned with net zero emissions by 2050 and facilitating increased investment in climate solutions.
In demonstrating delivery against the Net Zero Asset Managers initiative commitment, signatories will also submit disclosures in line with the Task Force on Climate-related Disclosures recommendations and climate action plans through The Investor Agenda investor networks for review. This process will ensure the approach applied is based on a robust methodology, consistent with the United Nations Race to Zero criteria and that action is being taken in line with the commitment statement.
Building on strong global representation at launch, the initiative will continue to expand over the coming months. The initiative is also set to join the ‘Race to Zero’, the UNFCCC-led global campaign that brings together net zero commitments from a range of leading networks and initiatives across the climate action community.