Asset managers pledge to hit net-zero goal

43 signatories to the Net Zero Asset Managers initiative have disclosed their first targets for the proportion of assets that is being managed in line with achieving net zero by 2050.

In a progress report released as COP26 continues in Glasgow, the Net Zero Asset Managers initiative reported that 43 asset managers committed 35 per cent of their combined US$11.9 trillion in assets under management to net zero.

“We welcome the asset managers who have stepped up and committed to reaching net zero emissions, helping the world address the climate crisis,” said Rebecca Mikula-Wright, chief executive of the Asia Investor Group on Climate Change and the Investor Group on Climate Change.

“The collaboration of global asset managers is a critical contribution as the world transitions to a decarbonised economy. We look forward to seeing strong action and increasing commitments from investors to achieve their targets.”

Signatories to the initiative are required to share their initial interim targets within a year of joining and regularly review them with the aim to bring the proportion of assets being managed 100 per cent in line with net zero.

Ninety-two new asset managers representing US$10.8 trillion in assets recently joined the initiative, bringing the total number of investors to 220 with US$57.4 trillion in assets.

The Net Zero Asset Managers initiative said that, if disclosures from signatories remained consistent, more than US$20 trillion could be managed in line with net zero and subject to targets consistent with reducing 50 per cent of emissions by 2030.

Among the new signatories to the initiative is Metrics, which also recently became the first non-bank asset manager in Australia to partner with the Climate Bonds Initiative.

“Metrics is determined to play a leading role in promoting and assisting with the transition to a low carbon economy,” said Metrics managing partner Andrew Lockhart.

“This presents an enormous opportunity and Metrics is committed to ensuring that we both lead by example and ensure our stakeholders have the means to participate in achieving a just and timely transition.”

In the lead-up to the UN Climate Change Conference (COP26) in Glasgow, 733 institutional investors managing US$52 trillion in assets signed a statement calling on governments to take more action on climate change.

“While we recognise the differentiated responsibilities and respective capabilities of countries, we believe that those who set ambitious targets in line with achieving net zero emissions and implement consistent national climate policies in the short-to-medium term, will become increasingly attractive investment destinations,” the statement said.

Countries that failed to set ambitious targets would be at a “competitive disadvantage” according to the statement.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.