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Summary
- Top assets managers controlling $9 trillion in assets have signed a pledge to do more to implement net zero carbon emission across their businesses.
- Under the initiative, individual asset managers will set interim targets for their portfolio companies in terms of what they can do to reduce their carbon emissions.
- Since the pandemic outbreak, most companies have slowed down their carbon emission reduction measures in order to ease pressure on their bottom lines.
In one of the largest green initiatives of its kind, a group of 30 top asset managers worldwide have pledged to push forward the agenda of net zero carbon emissions by 2050. These portfolio managers control nearly $9 trillion of combined assets and have a significant influence on the major publicly held companies across the world.
With this initiative, which was earlier limited to only a few of the large asset managers, the group has now enlarged to a major global alliance working to cut down carbon emissions, having ample financial firepower at its disposal to push forward this global agenda.
Over the past few months, these initiatives have taken a back seat because of the coronavirus pandemic, raising concerns among experts that the progress made so far in this regard may be lost.
The pledge
Global asset management major Blackrock has been a pioneer in pursuing the cause of Net Zero carbon emissions with its portfolio companies. Among the top asset management companies who have joined include, Legal & General Investment Management, Fidelity International, UBS Asset Management, Schroders, Wellington Management, DWS, among others. It is expected that more asset managers will join this pledge in the near future.
The group has pledged to align their investment portfolios with global efforts to limit average temperature rise to 1.5C, which was fixed in the Paris Agreement on climate change.
The members will have to review their targets at least every five years. The investor networks also involve the top green bodies, such as the Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, and Principles for Responsible Investment.
Also Read: Legal & General’s Asset Management Arm Pledges to Be More Rigid Towards Climate Change
Pollution and carbon emissions
Air and water pollution levels have increased to such levels that it has made life unsustainable for several species of animals and plants. The over usage of fossil fuels, which have played a big role in the burgeoning growth of the human race, is showing its ill effects, fast becoming a burden for us. The toxic gases and chemicals released into the atmosphere are responsible for global warming and some chronic ailments, such as asthma, cardiovascular ailments, and cancer. Moreover, these chemicals do not degrade easily and have adverse effects on the environment.
The asset managers have pledged to work with their asset owner clients on decarbonisation goals in sync with net zero by 2050 or sooner. Stephanie Pfeife, CEO of the IIGCC and the founding partner of this initiative, said that investors joining the movement are committed to act, and their efforts will help in attaining balance in favour of the global economic shift to net zero.
Other significant investors who have joined the initiative are Anaxis Asset management, Clean Energy Ventures, Gulf International Bank Asset Management, Inherent Group LP, Kempen Capital Management, and others.
