Leading asset managers commit to net zero emissions goal with launch of global initiative

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 here¹.

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 Management², 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 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 WHEB³.

Further commitments from other leading names in the sector are expected over coming months.

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.”

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.”

Michelle Scrimgeour, Chief Executive Officer, Legal & General Investment Management and member of UK Government’s COP26 Business Leaders Group: “By signing up to the Net Zero Asset Managers initiative LGIM is committing – in partnership and on behalf of our clients – to invest in alignment with the net zero emissions framework by 2050 or sooner. Our responsible investment strategies are already channelling capital towards low carbon solutions, we are accelerating our efforts to help our clients set and meet decarbonisation goals for their portfolios and investing in many of the world’s largest companies we continue to hold them to account. Delivering on this ambition requires substantial change across the global economy and LGIM will be at the heart of these efforts.”

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.”

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 on the run up to next year’s COP26 climate conference⁴.

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.

Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change and Founding Partner of the initiative: “We talk a lot of tipping points in our sector, but 30 of the world’s leading asset managers with assets under management of over $9 trillion committing to the goal of net zero by 2050 really can help tip the balance in favour of the global economic transition to net zero. This is action – not simply words.”

“The scale and significance of the asset managers joining the Net Zero Asset Managers initiative sends a clear signal to the wider sector that the financial firepower of institutional investors will be committed to making real progress towards a net zero and resilient future. As we reach the fifth anniversary of the Paris agreement, we extend an open invitation to all asset managers to join us in the commitment, collaboration and cohesion that will drive forward this initiative and the net zero transition.”

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 community⁵.

Footnotes

¹. See initiative website here.
². Excluding Pyrford International Limited.
³. Signatories managing more than $250 billion in assets are in bold.
⁴. See here for more details on the event.
⁵. See here for more detail on the campaign.