HomeCarbon NewsNet Zero Asset Managers Initiative Grows to 273 firms and +$60 trillion...

Net Zero Asset Managers Initiative Grows to 273 firms and +$60 trillion in AUM

The Net Zero Asset Managers (NZAM) was launched in December 2020 with 30 asset managers representing about $9 trillion in Assets Under Management (AUM).

It has grown to now include 273 firms, representing over $60 trillion in assets under management.

The group’s main purpose is to encourage asset managers to support the goal of net zero by 2050. This is in line with global efforts to limit warming to 1.5°C.

The recent additions include the T. Rowe Price, Credit Suisse Asset Management, and Frontier Investment Management. While old members like AXA Investment Managers and Aviva Investors made their initial goals more ambitious.

Marco Morelli, AXA Investment Management Executive Chairman said:

“Since our first submission in October, we have further intensified our efforts across the whole business to develop an approach which is robust and can be implemented in an effective manner by investment teams… Meaning our revised figure now stands at 65% of total assets managed in line with net zero by 2050.”

NZAM Asset Managers Net Zero Commitment

NZAM is part of the Glasgow Financial Alliance for Net Zero (GFANZ). Six Founding Partner investor networks formed the group namely:

  1. Asia Investor Group on Climate Change (AIGCC), 
  2. CDP Global, 
  3. Ceres, 
  4. Investor Group on Climate Change (IGCC), 
  5. Institutional Investors Group on Climate Change (IIGCC), and
  6. Principles for Responsible Investment (PRI).

NZAM asset managers’ commitment to transitioning their investment portfolios to align with the net zero emissions by 2050 is by far the biggest initiative there is.

According to IIGCC CEO, Stephanie Pfeifer:

“While there is some way to go, that $16 trillion of assets are now committed to being managed in line with achieving net zero by 2050, is a more than positive start – although targets must of course still translate into action.”

Signatories to the group agree to carry out a series of commitments including:

  • Setting interim targets for 2030 for the proportion of assets under management (AUM) in line with achieving net zero emissions
  • Review those goals every five years to ensure that the proportion of AUM covered by their net zero commitment increases up to 100%
  • Working in partnership with asset owner clients on their decarbonization goals

The set targets will see to it that asset managers assure real reductions in emissions at the businesses they invest in.

As per the NZAM’s report, the group members manage a total of $61 trillion in assets.

83 of the signatories who are managing $42 trillion have set their initial targets so far.

  • This translates to a total of $16 trillion of assets committed to meeting net zero emissions targets.

24 have tied 100% of their assets to the target. Meanwhile, 19 others have committed more than 75% of the funds they manage.

Rebecca Mikula-Wright, CEO of the AIGCC and the IGCC, noted that in the 18 months since NZAM formed, the world’s biggest asset managers have started setting targets and getting their portfolios on track for net zero by 2050. She further said that:

“This momentum must continue; climate is a risk that can’t be divested from… so investors will need to use their influence over capital flows, their influence on companies and their voice to policy-makers to speed up the transition to a net zero global economy.”

The Challenge in Setting Net Zero Emissions Targets

NZAM’s report noted that the geopolitical backdrop for target setting is “increasingly challenging”.

The group cited the increased politicization of ESG issues and changes in the regulatory and policy environments.

The report also highlighted some key themes that emerged during the target disclosure and review process. In particular, firms have different business models or approaches to the net zero transition process.

Also, some asset managers with varied clients across funds may face a lengthier process to align their AUM with net zero. But asset managers with concentrated funds may have more flexibility in aligning their assets.

Other big asset managers have voted against shareholders (from major banks that signed up to GFANZ) who desire to embrace climate goals.

Most Popular
LATEST CARBON NEWS

How The First Carbon Negative Nation of Bhutan Did It

As the world’s richest and largest emitting countries are struggling to reduce emissions, Bhutan became the first carbon negative nation. Fog-enshrouded temples nestled in mountainous...

Google’s Eco-Friendly Routing Comes to Europe

Google expanded its eco-friendly routing on its Google Maps to 40 countries across Europe. With Google Map’s eco-friendly routing, drivers can choose a route that’s...

UK Pension Schemes Under Pressure for Climate Impact Reporting

The mid-sized and smaller pension schemes in the UK are under tighter rules as new reporting regulations are requiring more detailed information. The UK has...

Salesforce Launches First-of-a-Kind Carbon Credit Marketplace

The first step to achieving net zero is to reduce carbon emissions. In response to this, Salesforce will launch a first-of-its-kind carbon credit solution...
CARBON INVESTOR EDUCATION

The 5 Top Carbon Offset Project Developers

Are you looking to directly reduce your carbon footprint or support projects that cut emissions elsewhere? Then carbon credits allow you to do either...

The Top 3 Private Carbon Companies to Watch Right Now

Right now, the carbon space is heating up. Dozens of companies are jumping into what’s fast becoming one of the hottest spaces to invest...

Carbon Insetting: The Target of Scope 3 Carbon Offset Accounting

Carbon offsets are a well-known sustainability concept so you most likely have heard of them. But there’s a relatively new sustainable supply chain term...

Tonne Year Accounting for Temporary Carbon Storage

You most likely know the climate benefits of storing carbon and removing gigatons of it from the atmosphere to limit climate change. But we also...