Grygo is the chief content officer for FTF & FTF News.
On Tuesday, July 6, officials behind the Net Zero Asset Managers initiative reported that they have hit a milestone in just six months — they have 41 new signatories, meaning that “128 investors managing $43 trillion” have made a commitment to the goal of helping the world achieve net zero greenhouse gas emissions by 2050.
“The latest signatories take the initiative close to representing almost half of the entire asset management sector globally in terms of total funds managed (standing at $100 trillion),” according to a prepared statement from the Net Zero initiative.
To remind you, the goal is to get “an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner,” according to its manifesto.
The group was launched in December 2020 and the effort has seen rapid growth, according to the initiative’s backers. The effort is overseen by six founding partner investor networks: Asia Investor Group on Climate Change (AIGCC), CDP, Ceres, Investor Group on Climate Change (IGCC), Institutional Investors Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI).
This latest set of new asset manager members, representing $6.8 trillion in assets, include: Amundi, Sumitomo Mitsui Trust Asset Management, Franklin Templeton, MFS Investment Management, HSBC Asset Management, and the International Business of Federated Hermes.
“New signatories based in North America and Europe are joined by a marked uptick in the number of Asian managers now part of the initiative,” according to the initiative’s statement. “Among other steps, this will see the investors work with clients to reach net zero emissions alignment across their portfolios by 2050 or sooner and set interim 2030 emissions reduction targets.”
To recap, the firms that sign up agree to the following:
- To work in partnership with asset owner clients on decarbonization goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management;
- Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner;
- And review their interim target at least every five years, with a view to ratcheting up the proportion of assets under management covered until 100 percent of assets are included.
The effort is highly ambitious, and the nuts-and-bolts of implementation will never be as heady as setting a truly laudable goal. But there’s a feeling that these asset managers could have a bottom-line impact in the fight against the horrors of climate change.
“We approach our journey with the clear acknowledgment that we must commit to finding the data and solutions to help us achieve global net zero emissions by 2050,” says Jenny Johnson, CEO and president of Franklin Templeton, in a prepared statement. “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.”
More about the latest signatories can be found here: https://bit.ly/2UqWwN4
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