Asian asset owners seek to lead continent's decarbonisation push

October 1, 2021

A group of leading Asian institutions with $4trn under management have launched a new collaboration aiming to lead the continent's push for decarbonisation in line with the 2015 Paris Agreement.

Six institutions announced on 29 September that they had teamed up to launch the Asia Transition Platform (ATP), led by Singapore-based Asia Research & Engagement, an organisation aimed at improving collaborative efforts on sustainability across the continent.

The ATP said that it aimed to "engage with at least 50 Asian companies across all of Asia’s leading financial markets" over the next three years, with an "initial focus on carbon risk and coal at financial institutions and coal-exposed power companies".

Investors that have backed the initiative include Dutch pension investment giant PGGM and the UK's Local Authority Pension Fund Forum (LAPFF), which represents the £276bn Local Government Pension Scheme system.

Aviva Investors, BMO Global Asset Management, Fidelity International, and Legal & General Investment Management are all also supporting the initiative.

Ben McCarron, Asia Research & Engagement founder and managing director, said: "Accelerating energy transition in Asia is critical to addressing the climate crisis, yet there is a gap between global investors who want to drive change, and the companies in Asia vital to making it happen."

Mirza Baig, global head of ESG investments at Aviva Investors, added that there was a "stark mismatch" between Asia's current situation and the circumstances needed to meet the terms of the Paris Agreement.

"The Asia Transition Platform gives a needed new impetus to global investor engagement with those Asian companies that are pivotal to energy transition," stated Doug McMurdo, chair of the LAPFF.

The Asia-Pacific region was responsible for more than 16bn metric tons of carbon dioxide emissions in 2020, according to data from Statista - more than all other regions combined. On its own, China accounted for nearly 60% of the region's emissions and 31% of the global total.

North America accounted for 5.3bn metric tons of carbon dioxide emissions last year, while Europe's emissions amounted to almost 3.6bn. However, every region recorded lower emissions in 2020 compared to the previous year - largely due to restrictions on movement placed on populations in an effort to limit the spread of Covid-19.