Wealth managers commit to taking $16 trillion in assets to net-zero target


Smoke billows over a factory at sunset in Rugby, Britain, on February 10, 2021. REUTERS/Matthew Childs/File Photo

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LONDON, May 31 (Reuters) – Asset managers have so far committed $16 trillion in assets to achieve net-zero greenhouse gas emissions by 2050 or sooner, 39% of their total assets, according to the Net Zero Asset Managers Initiative’s latest report dated Tuesday showed.

The group, which was formed in late 2020 to encourage wealth managers to reach net zero by 2050 and help keep global temperature rise to 1.5 degrees Celsius, now has 273 signatories, including AXA Investment Managers, Aviva Investors and Columbia Threadneedle.

Signatories are required to set interim targets for 2030 and review those targets every five years to increase the proportion of assets covered by their net-zero commitment to 100%.

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The targets aim to ensure that asset managers ensure real emissions reductions from the companies in which they invest.

In its most recent report, the group said members manage a total of $61 trillion. Of those, 83 investors, managing $42 trillion, have set goals so far, with 39% of their wealth pledged to reach net zero by 2050. This is 4% more than in November, when the first original targets were published ahead of the UN Climate Change Conference (COP26) in Glasgow.

24 signatories have committed 100% of their assets to the goal, while 19 others have committed more than 75% of the funds they manage.

“While there is still work to be done, it is a more than positive start that $16 trillion in assets are now under management to reach net zero by 2050 – although of course the targets have yet to be translated into action,” Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, in a press release accompanying the report.

The IIGCC is an investor group trying to push its members towards net zero.

In its report, the Net Zero Asset Managers Initiative also described the geopolitical backdrop for target setting as “increasingly challenging” and noted an increasing politicization of ESG (environmental, social and governance) issues and changes in the regulatory and policy environment.

Climate activists have welcomed the many investor networks that have been set up to support decarbonization efforts, but they say the goals often lack ambition and have been under-delivered.

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Reporting by Tommy Reggiori Wilkes. Editing by Jane Merriman

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