Asset managers commit $16 trillion in assets to reach net zero goal

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

The group, launched in late 2020 to encourage asset 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 must set interim targets for 2030 and review these targets every five years so that the proportion of assets covered by their net zero commitment is increased to 100%.

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

In its latest report, the group said its members manage a total of $61 trillion. Of that amount, 83 investors managing $42 trillion have set targets to date, with 39% of their assets committed to reaching net zero by 2050. This represents a 4% increase from November, when first initial targets were published ahead of the United Nations Climate Change Conference (COP26) in Glasgow.

Twenty-four signatories have tied 100% of their assets to the target, while 19 others have committed more than 75% of the funds they manage.

“While there is still some way to go, the fact that $16 trillion in assets are now committed to be managed in line with achieving net zero by 2050 is a more than positive start. – although of course goals still need to be translated into action,” Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, said in a press release accompanying the report.

The IIGCC is an investor group that seeks to drive its members towards net zero.

In its report, the Net Zero Asset Managers Initiative also called the geopolitical context for goal setting “increasingly challenging”, noting increased politicization of ESG (environmental, social and governance) issues and shifts in regulatory and political environments.

Climate activists have hailed the many investor networks created to support decarbonization efforts, but they say goals often lack ambition and too little has translated into action. (Reporting by Tommy Reggiori Wilkes. Editing by Jane Merriman)