More than 250 investors have committed to a relaunched version of the Net Zero Asset Managers (NZAM) initiative today.
The United Nations-backed body has reinvented itself after a year-long hiatus, during which it consulted with its members about how it could remain viable.
While NZAM attracted more than 330 members at its height, it has more recently faced mass departures as asset managers grapple with the political and economic realities of meeting net zero by 2050.
A number of large global investors have been accused by US Republicans of breaching their fiduciary duties by pursuing decarbonisation, and governments in many key markets have failed to introduce the policy measures that were anticipated to make investing in the climate transition financially viable.
Earlier this month, more than 50 asset owners issued a public statement calling on their managers to stick with NZAM despite the headwinds.
Now, the initiative has officially been relaunched and has retained most of its members.
More than 250 investment houses have signed up to a commitment statement in which they “acknowledge that the physical consequences of climate change are being experienced, are disruptive and are having significant direct and indirect economic costs, which are projected to increase if not effectively addressed”.
“As an asset manager, we recognise our fiduciary duties to consider how the financial risks and opportunities presented by climate change may impact client investment outcomes,” read the statement.
“In addition, we recognise that as asset managers we are able to support our clients through, for example, the development of investment products, the provision of data and information, and education and capacity-building on the financial implications of climate change.”
Citing the Paris Agreement, members must “commit to support investing aligned with the global goal of net zero greenhouse gas emissions”.
Compared with the previous version, the statement puts more emphasis on differing client demands and the role of other actors – such as policymakers, regulators and portfolio companies – in making the commitments viable.
But, when they can, NZAM members commit to providing clients with “information to help them understand and act on climate-related financial risks and opportunities”, and supporting them to deliver on their climate goals through asset allocation decisions.
They must set near-term climate targets consistent with the net zero, and review them periodically.
They also commit to implement stewardship strategies to steer portfolio companies, and engage with investment consultants, data providers, index providers, stock exchanges, ratings agencies and others to encourage the development of products and services that support these objectives.
On policy advocacy, the new statement commits its members not to “undermine” NZAM’s goals through their broader lobbying efforts.
And finally, asset managers must disclose a plan for implementing their commitments, and report annually on the actions they have taken and any outcomes they’ve secured.
“The strong investor backing for NZAM signals that asset managers around the world continue to recognise and take steps to address climate-related financial risks and opportunities,” the initiative said in a statement.
