An initiative specifically focussed on asset managers getting to net-zero has been launched with 30* founding signatories drawn from across the world.
The launch of the Net Zero Asset Managers initiative comes ahead of the five-year anniversary of the Paris Agreement tomorrow.
Other asset managers are encouraged and expected to join the initiative. Signatories commit to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner and investing aligned with that goal.
The commitment includes prioritising the achievement of real economy emission reductions within the sectors and companies in which the asset managers invest.
Asset managers signed up to the initiative commit to working with asset owner clients on decarbonisation goals. Fulfilling the asset managers’ commitments is likely to be contingent on the collaboration with asset owners, the initiative noted.
To fulfil the requirements established by the initiative, signatories also make further commitments, including to setting an interim target for 2030 for the proportion of assets to be managed in line with the net-zero goal.
The interim target is to be set before the UN climate change conference in November 2021 (COP26), or, for signatories joining too late for this, within a year of making the initiative’s commitment. The target should be by a date no later than 2030.
Signatories also commit to “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”.
The asset managers said the commitments were made “in the expectation that governments will follow through on their own commitments to ensure the objectives of the Paris Agreement are met”.
This echoes the commitment statement for members of the UN-convened Net-Zero Asset Owner Alliance, which was launched in September 2019 and now has 33 members.
“The asset management industry needs to show leadership and that’s what this is about”
David Blood, senior partner at Generation Investment Management
Nigel Topping, the UK’s high level climate action champion for COP26, said the Net Zero Asset Manager initiative “will be noticed” by national governments, the corporate C-suite, and asset owners.
“This is a very significant contribution to the whole-of-society race to zero,” he said.
Generation Investment Management was a key driving force behind the move to build a wider net-zero movement in the asset management industry.
“The Net Zero Asset Managers initiative represents a significant moment on the road to addressing the climate crisis,” said David Blood, senior partner at Generation.
Speaking to journalists yesterday, Blood acknowledged there were “plenty” of hurdles facing asset managers signing up to the commitment, such as incomplete data and imperfect methodologies, but said “we need to move past them as quickly as we possibly can”.
“The point is that leadership is required at this critical time,” Blood said. “We know we have an objective, which is to get to net-zero as fast as we possibly can, and we need to get started. The asset management industry needs to show leadership and that’s what this is about.”
The Net Zero Asset Managers initiative will be managed globally by six founding partner investor networks, including the Institutional Investors Group on Climate Change and the Principles for Responsible Investment.
*The 30 founding 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, Gulf International Bank Asset Management, Handelsbanken AB Publ, 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.