Two European asset managers have this week pledged to be net zero by 2050.
German investment manager KGAL has committed to being climate-neutral by the beginning of 2021, as well as having a net-zero portfolio by 2050.
It plans to achieve these goals by offsetting its carbon emissions, including a 5% reduction per year per member of staff over the next 10 years, and substantially increasing the amount of green energy generated by the managed investment portfolio. It currently excludes direct investments in fossil fuels by investment funds managed by KGAL.
The strategy is in line with the Paris Climate Agreement and official European, as well as German, long-term climate goals.
KGAL chief executive Gert Waltenbauer said: “Living up to our mission statement means offering sustainable products for our investors, but also becoming a sustainable asset manager that contributes to a sustainable society.”
Kempen Capital Management
Similarly, Dutch specialist asset manager Kempen Capital Management has set short, medium and long-term goals to address climate change.
By 2025 it plans to be aligned with achieving the Paris Agreement and Dutch climate agreement for all listed investments, and 2030 for all non-listed investments. By 2050 the firm hopes to contribute to the transition to a low-carbon economy by having net-zero emission investments.
Kempen said it will achieve these by excluding coal and tar sands from all its investments by 2022, requiring clear climate engagement strategies and progress updates from its investments, and increasing its investment in green bonds by 2025.
“We will invest in funds that prefer green bonds over non-green bonds if the risk-returns are similar,” said Danny Dekker, vice-president environment, social and governance advisory at Kempen Capital Management. “The funds have green bond targets on a comply or explain basis – so it must fit with the investment strategy. Targets need to be relevant, although the investment strategy characteristics need to be taken into account, for example government bonds versus credit funds.”
He added the firm will also be investing in sustainable-linked bonds assessed on a case-by-case basis.
“We are also looking at funds with a criteria including compliance with the Green Bond Principles and screening the issuer on its ESG profile (not only the issues). This means that the financing should relate to climate change-related activities to have a positive impact on the energy transition.”
Narina Mnatsakanian, director sustainable and impact investment at Kempen, said: “Investors have a critical role to play in both facilitating the transition to a low-carbon economy and managing the climate risks of their investee companies.”