Global asset manager aims to halve its carbon intensity by 2030

abrdn has announced it intends to halve the carbon intensity of the assets it manages by 2030, through a strategy involving decarbonisation, net-zero solutions and active ownership.

“At abrdn we are acutely aware of our obligation to support the drive towards net zero,” said abrdn chief executive Stephen Bird.

“That’s why I’m pleased we can announce these climate commitments today – both for the investments we manage and our own operations.”

abrdn said its strategy is focussed on net-zero directed investing that moves towards a goal of reaching net zero “in the real world” rather than just in portfolios.

Shifting funds out of carbon-intensive stocks into greener alternatives would not be the solution to the climate change crisis, according to Mr Bird.

“Decarbonising a portfolio is not the same as decarbonising an industry. To achieve that we need effective engagement with companies, because more seismic change will come from backing credible transition firms on their path from high to low carbon intensity,” he said.

abrdn is a signatory to the Net Zero Asset Managers Initiative that now has a total of 220 signatories managing US$57.4 trillion in assets.

Carbon pricing, one of the main policy suggestions made by the initiative, is also a key concern for abrdn.

“Bolder, collective action by governments is desperately needed,” said Mr Bird.

“Effective incentives in the form of appropriate carbon pricing are absolutely critical to enable capital allocation in line with net zero and to create an investment environment that rewards companies and investors that go green.”

Morningstar previously reported that asset managers will play a “critical role” in decarbonising the global economy.

Under its plan for active ownership, abrdn will engage with its highest financed emitters to monitor their progress towards meeting net-zero standards, and divest from companies that have made insufficient progress after two years.

About 30 per cent of abrdn’s assets under management are currently managed in line with achieving net zero by 2050. The firm said it aims to increase this proportion by developing net-zero solutions, through active engagement with clients and transitioning its fund range in support of reaching net zero.

In terms of decarbonisation, abrdn has committed to tracking and reducing the carbon intensity of its portfolios, incorporating analysis into its investment process and providing support to transition leaders and climate solutions.

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.