- Ahead of Earth Day and Leaders Summit on Climate, initiative announces it now includes BlackRock, Vanguard, and State Street Global Advisors
- Asset managers promise to work with clients to reach net zero emissions by 2050 or sooner and set 2030 emissions reduction targets
More of the world’s largest asset managers announced today that they are joining the Net Zero Asset Managers initiative, a clear sign that the global movement for a net-zero emissions economy is growing stronger and more determined. The 14 new signatories, which collectively manage nearly $5 trillion in assets and include the world’s third largest asset manager State Street Global Advisors, join 73 other signatories in committing to reach net zero greenhouse gas emissions by 2050 or sooner and to set interim targets for 2030.
Launched in December 2020 with 30 signatories, the global initiative has now grown to include 87 signatories with nearly $37 trillion in assets under management, representing nearly 40 percent of the total assets under management across the globe. The number of signatories has nearly tripled and the total assets under management have quadrupled since the launch. The new signatories include: Alquity Investment Management, BankInvest, Colony Capital, Coutts Asset Management, EcoFin, Insight Investment, Quinbrook Infrastructure Partners, Ridgewood Infrastructure, Russell Investments, Sage Advisory, State Street Global Advisors, Trillium Asset Management, Valo Ventures, and Vert Asset Management.
With State Street Global Advisors announcing its commitment today, the three largest asset managers in the world are now signatories to the initiative. BlackRock and Vanguard announced their participation in March 2021.
Cyrus Taraporevala, President and Chief Executive Officer, State Street Global Advisors, said: “Climate change poses one of the most serious risks to long-term investors and we are pleased to join this important initiative. We are especially keen to leverage our position as one of the world’s largest asset managers to raise awareness of the systemic risks associated with climate change, and to help all stakeholders navigate the difficult choices we face as we effectively manage the transition risks. The goal of net-zero-carbon emissions by 2050 is consistent with our commitment to drive long-term value on behalf of our clients.”
The formal announcement will be made today at a special event hosted by Ceres with the U.S. Special Presidential Envoy for Climate John Kerry showcasing how private sector finance leaders are key to driving the net-zero transition. The U.S. administration is mobilising world leaders on April 22-23 for the Leaders Summit on Climate to galvanize efforts by major economies to scale action on the climate crisis.
John Kerry, U.S. Special Presidential Envoy for Climate, said: “The largest financial players in the world recognize energy transition represents a vast commercial opportunity as well as a planetary imperative. As countries around the world move to decarbonize, the large sums these institutions are dedicating to climate finance also reflect a growing understanding of how critical a low-carbon global economy is to their business models. Ultimately, their commitment of capital and assets, as well as adherence to high standards and reporting, will accelerate the transition to this new economy, create a massive number of new jobs, and increase our collective ability to tackle the climate crisis.”
The asset managers commit to set interim targets for 2030, consistent with a fair share of the 50% global reduction in emissions identified as a requirement in the IPCC special report to limit increase in global temperatures to no more than 1.5-degrees Celsius. They will be asked to submit an interim target, within a year of joining the initiative, for the proportion of assets to be managed in line with reaching net-zero emissions by 2050 or sooner.
Signatories will also commit to transparent and rigorous accountability. They will annually report progress against the Task Force for Climate-related Financial Disclosures (TCFD) recommendations, including implementing a climate action plan and ensuring their plans are based on a robust methodology, consistent with the Race to Zero criteria, and action is being taken in line with the commitments.
The Net Zero Asset Managers initiative is managed globally 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). In turn, the initiative is endorsed by The Investor Agenda, of which the investor networks are all founding partners, along with the United Nations Environment Programme Finance Initiative (UNEP FI).
Rebecca Mikula-Wright, Executive Director of the Asia Investor Group on Climate Change, said: “As we head towards COP26 every new commitment counts and we expect to see more of these pledges and the actions that will follow from asset managers active in Asia. The response in financial markets to climate risk must continue to accelerate if we are to meet our shared Paris Agreement goals, and commitments made under the Net Zero Asset Managers initiative can go a long way to accelerating this change.”