Net Zero Asset Managers now represents 36% of all invested capital in the world

Forty-three new fund groups have signed up to the Net Zero Asset Managers initiative, which commits signatories to net zero greenhouse gas emissions by 2050.

Launched in 2020, the initiative now totals 73 signatories and represents $32trn in AUM. This is 36% of all invested capital in the world.

As signatories, these companies have committed to set interim targets for 2030 consistent with a 50% reduction in greenhouse gas emissions. These must be set within a year of joining the initiative.

In addition, their progress will be subject to annual reporting against recommendations from the Task Force for Climate-related Financial Disclosure (TCFD). These will include submitting a climate action plan to the Investor Agenda, which endorses the initiative.

It remains to be seen what strategies signatories will employ but recent research from the UN-backed Net Zero Asset Owner Alliance revealed top asset owners favour engagement over divestment when pursuing such goals.

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The new signatories to the initiative include some of the largest asset managers in the world, such as BlackRock, Standard Life Aberdeen, Vanguard Group and Allianz Global Investors.

“Over a third of the world’s AUM is now committed to securing a net zero and resilient future through the Net Zero Asset Managers initiative,” said Stephan Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC), one of the founding partners of the initiative.

“We need to move the narrative to reflect this, no longer is this a coalition of the willing – this is a coalition of the determined. Ambition is being matched by acceleration.”

The other founding members of the Net Zero Asset Managers initiative include the Asia Investor Group on Climate Change, Ceres, CDP, Investor Group on Climate Change, and Principles for Responsible Investment (PRI).

The initiative is also accredited by the United Nations' Framework Convention on Climate Change Race to Zero campaign.