The Net Zero Asset Managers initiative (NZAM) has announced a “new chapter”, in which its members will no longer have to set 2030 targets or commit to align with net zero by 2050.
The body has been under pressure recently to loosen its membership requirements or face an exodus of members.
A growing number of asset managers are facing legal threats from politicians in the US, who disagree with financial institutions making pledges to support the goals of the Paris Agreement.
Investors like BlackRock have consequently ditched NZAM, because the initiative required it to publicly commit to align with “global efforts to limit warming to 1.5°C” – including by investing in line with reaching net zero by 2050, and setting interim targets for a growing proportion of its assets.
NZAM’s original commitment statement also required regular, granular progress reports, and a recognition of the value of collaborative engagement with companies and asset owners.
In January, NZAM suspended its activities to stave off further departures, and promised to rethink its rules. It removed the names of its members from its website.
Today, it circulated a new commitment statement to asset managers, which allows members to pursue their own approaches without minimum standards.
Instead of having to set a 2030 interim target, as before, members will simply have to set a near-term climate target that is consistent with the global goal of reaching net zero.
They will still have to submit their targets for review within 12 months, and review them at least every five years.
The new statement is more explicit about the need for members to consider their fiduciary duties, and deliver “better investment outcomes” as part of their NZAM endeavours.
In a blog explaining the move, NZAM said it was “ready for its next chapter”.
After consulting with hundreds of financial institutions, it claimed “the feedback was clear: retain ambition, remain globally inclusive, and ensure the Commitment Statement continues to be practical within the evolving landscape”.
Despite claiming to retain its ambition, the new commitment statement has been gutted of any reference to reaching net zero by 2050, and NZAM said this was done “to reflect diverse jurisdictional realities and accommodate signatories from a wider range of markets”.
China and the US are among the major markets that are not targeting net zero by 2050, with the former aiming for carbon neutrality by 2060, and the latter having withdrawn completely from the Paris Agreement.
A spokesperson for State Street Investment Management, which was rumoured to be considering following BlackRock in its departure earlier this year, told IPE: “We have received and are in the process of reviewing the new NZAM commitment statement.”
Adrien Couret, the chief executive officer of French insurer Aéma Groupe, stressed the importance of “daily interaction between our asset owner and asset manager functions”, adding: “We firmly believe in the value of initiatives that foster strong links and create synergies between AOs [asset owners] and AMs [asset managers], which is precisely why we support the NZAM initiative.”
NZAM will resume its activities fully in January 2026, when it will publish an updated list of its members.
This article has been updated to clarify NZAM’s new position on setting interim targets and to state that NZAM wrote a blog explaining the move, not the Principles for Responsible Investment.
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