UBS, IFM Investors and AXA Investment Management are among a group of 30 asset managers who have pledged to have net-zero emissions by 2050 across their investments.
The collective, representing more than $9 trillion of assets under management (AUM) has launched the Net Zero Asset Managers initiative, aiming to support zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius.
The group has also committed to investing in line with the goal, prioritising real economy emissions reductions within sectors and companies.
The asset managers who have signed on include Fidelity, Robeco, ATLAS Infrastructure Partners, Calvert Research and Management, CCLA Investment Management, Schroders, WHEB, among others, as well as UBS, IFM and AXA. More firms are expected to join in the coming months.
Under the initiative, the asset manager signatories have committed to working in partnership with asset owner clients on decarbonisation goals, consistent with the goal to reach net-zero emissions by 2050 or sooner across all assets under management.
They will need to set an interim target for the proportion of assets to be managed in line with the 2050 or sooner goal, and the managers have promised to review their interim target at least every five years, with a view to ratcheting up the proportion of AUM covered until 100 per cent of assets are included.
Other requirements include reporting in line with the Task Force on Climate-Related Financial Disclosures recommendations, implementing a stewardship and engagement strategy, with a clear escalation and voting policy and the development of products aligned with the 2050 net-zero goal.
The group’s commitment stated there is an “urgent need to accelerate the transition towards global net zero emissions and for asset managers to play our part to deliver the goals of the Paris Agreement and ensure a just transition”.
David Neal, chief executive of IFM commented his firm believes it is in the “financial interests” of its investors and members to address climate risk.
Meanwhile Robeco CEO Gilbert Van Hassel commented society needs to adapt now.
“We cannot solve big problems such as climate change and the rapid decline of biodiversity on our own,” Mr Van Hassel said.
“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 wellbeing.”
The Net Zero Asset Managers pledge will be managed by six investor networks, including the Australian and New Zealand based Investor Group on Climate Change (IGCC) and the UN-backed Principles for Responsible Investment (PRI).
The initiative is set to expand in the coming year, according to the IGCC.
The body’s CEO, Emma Herd, said asset managers face a “specific and complicated set of issues in shifting to net zero”.
“This new global commitment offers and important pathway to help managers navigate this transition, while continuing to generate benefits for their clients,” Ms Herd said.
“We look forward to working with Australian and New Zealand managers to implement a roadmap to net zero.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].