Franklin Templeton, Federated Hermes, Ninety One, Amundi, HSBC Asset Management and GAM are among 41 asset managers, representing $6.8trn in assets, to have joined the Net Zero Asset Managers initiative.
The asset managers have committed to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner, in line with efforts to limit global warming to 1.5°C, by working with asset owners to set their own decarbonisation goals, setting targets for proportions of AUM to be aligned with net-zero emissions – and reviewing these targets, put in place engagement strategies to ensure voting policies are consistent with net-zero ambitions and create investment solutions that will focus on climate change mitigation.
They will also have to report their progress annually against the Task Force for Climate-related Financial Disclosures recommendations, including implementing a climate action plan that is consistent with the United Nations ‘Race to Zero’ criteria. They also agree only to use offsets that involve long-term carbon removal where there are no technologically and/or financially viable alternatives to eliminating emissions.
The new signatories brings the total to 128, representing $43trn in assets. The group says this is nearly half of all funds managed globally in the asset management sector, estimated at $100trn.
Jenny Johnson, CEO and president of Franklin Templeton, said: “We approach our journey with the clear acknowledgement that we must commit to finding the data and solutions to help us achieve global net zero emissions by 2050. We will work toward this goal in a spirit of authentic engagement and partnership with our clients and stakeholders, in keeping with our belief that good stewardship as a global asset manager means managing and allocating capital to benefit our clients across generations.”
Signatories also commit to prioritising real-economy emissions reductions, taking account of Scope 3 emissions, and putting in place a stewardship and engagement strategy to achieve net zero by 2050.
Saker Nusseibeh, CEO of International at Federated Hermes, said: “The position that we occupy as the investment management industry is one of unique influence. By way of intelligent and considered stewardship of capital we have the potential to effect genuine and positive change. Conversely, collective inertia risks compounding the crisis we face to an irreversible extent. It is for these reasons that we have a responsibility to make the right choices, to the benefit of our clients, their end beneficiaries and indeed society at large.”
Another new signatory is Ninety One, which told ESG Clarity in June it would be joining with three key action points. The first South Africa-headquartered asset manager to sign, it said it felt “uniquely positioned to recognise and advocate for a more inclusive and fair transition for the entire planet”.
Therese Niklasson, global head of ESG at Ninety One, said: “Emerging market economies need time, support and financial resources to transition, yet the funding shortfall is huge, with just 20% of clean energy-investment going to these regions. Divesting from high-emitting nations and sectors further expedites the problem, diverting away the capital critically needed by these economies to fund their transition.”
See also: – Ninety One: We want to be the leading emerging market voice in the sustainable transition
The initiative was put in place by six investor networks including the Institutional Investors Group on Climate Change (IIGCC).
Stephanie Pfeifer, CEO at IIGCC, said: “In just six months nearly half of the global asset management sector has committed to achieving net zero emissions with their clients across the funds they manage. This marks a fundamental tipping point across the investment sector and a significant boost in efforts to tackle climate change and decarbonise the global economy. There’s a lot more to achieve, but the sector is increasingly on a path to a net zero future.”
Fiona Reynolds, outgoing CEO of PRI, added: “We are very pleased to welcome this group of signatories to the Net Zero Asset Managers initiative. As we approach COP26, it’s essential that actors across the investment chain alongside governments continue to take net-zero-related actions, and to be held accountable for those commitments through interim and longer-term targets.”
The full list of new signatories is:
Affirmative Investment Management
Amundi Asset Management
Ashmore Group plc
Asteria Investment Managers
Brandywine Global Investment Management
BT Funds Management NZ
ClearBridge Investments LCC
DIF Capital Partners represented by DIF Management BV
DSC Meridian Capital LP
Evenlode Investment Management
Fiera Capital Corporation
Green Century Capital Management
HSBC Asset Management
InfraRed Capital Partners Limited
KBI Global Investors
La Francaise Group
LocalTapiola Asset Management
Martin Currie Investment Management
MFS Investment Management
Payden & Rygel
RAM Active Investments SA
River and Mercantile Group
Shinhan Asset Management Co.
Sumitomo Mitsui Trust Asset Management
Swisscanto Invest by Zucherkantonal Bank
The International Business of Federated Hermes
Troy Asset Management
Vista Equity Partners
Willis Towers Watson