The Net Zero Asset Managers initiative grows to 87 investors managing $37 trillion, with the world’s three largest asset managers now committing to net zero goal
20 April 2021
Ahead of Earth Day and Leaders Summit on Climate, initiative announces it now includes BlackRock, Vanguard, and State Street Global Advisors
Asset managers promise to work with clients to reach net zero emissions by 2050 or sooner and set 2030 emissions reduction targets
More of the world’s largest asset managers announced today that they are joining the Net Zero Asset Managers initiative, a clear sign that the global movement for a net-zero emissions economy is growing stronger and more determined. The 14 new signatories, which collectively manage nearly $5 trillion in assets and include the world’s third largest asset manager State Street Global Advisors, join 73 other signatories in committing to reach net zero greenhouse gas emissions by 2050 or sooner and to set interim targets for 2030.
Launched in December 2020 with 30 signatories, the global initiative has now grown to include 87 signatories with nearly $37 trillion in assets under management, representing nearly 40 percent of the total assets under management across the globe. The number of signatories has nearly tripled and the total assets under management have quadrupled since the launch. The new signatories include: Alquity Investment Management, BankInvest, Colony Capital, Coutts & Co, EcoFin, Insight Investment, Quinbrook Infrastructure Partners, Ridgewood Infrastructure, Russell Investments, Sage Advisory, State Street Global Advisors, Trillium Asset Management, Valo Ventures, and Vert Asset Management.
With State Street Global Advisors announcing its commitment today, the three largest asset managers in the world are now signatories to the initiative. BlackRock and Vanguard announced their participation in March 2021.
Cyrus Taraporevala, President and Chief Executive Officer, State Street Global Advisors, said: “Climate change poses one of the most serious risks to long-term investors and we are pleased to join this important initiative. We are especially keen to leverage our position as one of the world’s largest asset managers to raise awareness of the systemic risks associated with climate change, and to help all stakeholders navigate the difficult choices we face as we effectively manage the transition risks. The goal of net-zero-carbon emissions by 2050 is consistent with our commitment to drive long-term value on behalf of our clients.”
The formal announcement will be made today at a special event hosted by Ceres with the U.S. Special Presidential Envoy for Climate John Kerry showcasing how private sector finance leaders are key to driving the net-zero transition. The U.S. administration is mobilizing world leaders on April 22-23 for the Leaders Summit on Climate to galvanize efforts by major economies to scale action on the climate crisis.
John Kerry, U.S. Special Presidential Envoy for Climate, said: “The largest financial players in the world recognize energy transition represents a vast commercial opportunity as well as a planetary imperative. As countries around the world move to decarbonize, the large sums these institutions are dedicating to climate solutions reflect a growing understanding that the transition to a low-carbon global economy will be critical for their business models. To be credible and effective as market signals, these financial commitments should adhere to clear definitions, metrics, and reporting. Ultimately, the transition to this new economy will create a massive number of new jobs and increase our collective ability to tackle climate change.”
The asset managers commit to set interim targets for 2030, consistent with a fair share of the 50% global reduction in emissions identified as a requirement in the IPCC special report to limit increase in global temperatures to no more than 1.5-degrees Celsius. They will be asked to submit an interim target, within a year of joining the initiative, for the proportion of assets to be managed in line with reaching net-zero emissions by 2050 or sooner.
Signatories will also commit to transparent and rigorous accountability. They will annually report progress against the Task Force for Climate-related Financial Disclosures (TCFD) recommendations, including implementing a climate action plan and ensuring their plans are based on a robust methodology, consistent with the Race to Zero campaign criteria, and action is being taken in line with the commitments.
Abdallah Nauphal, Chief Executive Officer at Insight Investment, said: “Climate change is one of the greatest challenges of our time and we have been encouraged to see governments and businesses grapple with its far-reaching implications by introducing meaningful policy and initiatives ahead of COP26 later this year. We are committed to helping our clients manage the risks of climate change and to transition their portfolios in a manner that can also deliver financial and liability objectives.”
The Net Zero Asset Managers initiative is managed globally by six founding partner investor networks: 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 the United Nations Environment Programme Finance Initiative (UNEP FI).
Mindy Lubber, Ceres CEO and President, said: “The accelerating growth of the Net Zero Asset Managers initiative signals a great awakening in the finance sector. The largest financial leaders in the world are increasingly embracing the inescapable reality that climate change is a systemic risk. We know investments impact climate change just as climate change impacts investments. That’s why we welcome this new wave of commitments from the largest asset managers in the world — all of whom are joining this ambitious movement of real action in the U.S. and around the globe.”
The Net Zero Asset Managers initiative is accredited by the United Nations Framework Convention on Climate Change (UNFCCC) Race to Zero campaign.
The initiative has an advisory group drawn from representatives from signatory asset managers. Members include: Takeo Omori, Asset Management One; Corinna Orbach, DWS; Edward Mason, Generation; Chris Newton, IFM Investors; Catherine Ogden, LGIM; and Wendy Cromwell, Wellington Management. The advisory group provides recommendations to the initiative’s Steering Committee with regard to governance and operations and serves as champions for its work.
Rebecca Mikula-Wright, Executive Director of the Asia Investor Group on Climate Change, said: “As we head towards COP26 every new commitment counts, and we expect to see more of these pledges and the actions that will follow from asset managers active in Asia. The response in financial markets to climate risk must continue to accelerate if we are to meet our shared Paris Agreement goals, and commitments made under the Net Zero Asset Managers initiative can go a long way to accelerating this change.”
Paul Simpson, Chief Executive Officer of CDP, said: “As a founding partner of the Net Zero Asset Managers initiative, CDP is delighted to see it continue to gather strong momentum and support. For more than 20 years, CDP has empowered the global asset management community with the tools to drive environmental transparency and action. As a sector that plays a critical role in the transition to a net zero carbon economy, CDP is encouraged by the growing number of asset managers committing to decarbonize their portfolios, including the three largest asset managers in the world. We look forward to seeing this translate into science-based emissions reduction targets, investment activity that is aligned with the Paris Agreement and near-term accountability and reporting.”
Emma Herd, Chief Executive Officer of the Investor Group on Climate Change, said: “The continued growth of the Net Zero Asset Managers initiative is a reflection of the rapid shift occurring in capital markets towards the net zero emissions transition. In particular, we welcome Quinbrook Infrastructure Partners as one of the latest signatories to the initiative and look forward to more commitments emerging from Australia and New Zealand in coming months.”
Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change, said: “The determination of the investment community to play its part in securing a net zero and resilient future is evident in the commitments being made through the Net Zero Asset Managers initiative. All asset managers are signing up to a rigorous commitment with clear interim target setting ensuring there is significant progress made in the short term as well as long term. We welcome the new signatories announced today and encourage all asset managers to join us in driving real world change aligned with the goals of the Paris Agreement.”
Fiona Reynolds, Chief Executive Officer of PRI, said: “It’s encouraging to see the momentum for net-zero commitments from the asset management sector and it’s critical that this momentum continues as we approach COP26 and beyond. Asset managers who manage money on behalf of their clients have an essential role to play as we transition to a zero carbon economy. To be successful, however, asset managers need to ensure that they are equipped with the skills, talent, tools and knowledge required. Leadership and innovation, working in partnership with clients, increased ambition, cultural alignment and accountability are essential if we are to succeed and reach net-zero by 2050.”
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