Investment consultants launch net zero initiative

News Team, 20/09/2021

Twelve investment consulting firms have committed their support to net zero global greenhouse gas emissions by 2050 or sooner

The twelve investment include Barnett Waddingham, bfinance, Cambridge Associates, Cardano, Frontier, Hymans Robertson, JANA, LCP, Meketa, Redington, Willis Towers Watson and Wilshire.

The firms, which are responsible for advising institutional asset owners worth approximately $10 trillion, have launched the Net Zero Investment Consultants Initiative (NZICI), which commits to nine specific action points that investment consultants will take.

The nine actions are detailed below.

Within investment advisory services:

1. Integrate advice on net zero alignment into all our investment consulting services as soon as practically possible and within two years of making this commitment

2. Work with our institutional asset owner clients to identify the investment risks from climate change, highlight the importance of net zero alignment and, where applicable, support our clients in developing policies that align their portfolios to a net zero pathway

3. Support efforts to decarbonize the global economy by helping our clients prioritize real economy emissions reductions, reflecting the target of 50% global emissions reduction by 2030 or sooner using existing decarbonization methodologies.

4. Assess and monitor asset managers on the integration of climate risks and opportunities in their investment decisions and stewardship and reflect this evaluation in our client recommendations

With respect to fully discretionary services:

5. Align with the Net Zero Asset Manager Initiative as soon as practically possible and within two years of making this commitment

With respect to our own business operations:

6. Set emissions reduction targets across all our operational emissions in line with 1.5°C scenarios

 Within the wider financial community:

7. Where suitable net zero methodologies do not exist, work collaboratively for the benefit of our clients to address these challenges, seeking harmonized methodologies

8. Engage, independently or as a group, with regulators and policymakers, to facilitate the transition to net zero carbon emissions, addressing any barriers to our clients adopting and achieving their net zero targets

To ensure accountability:

9. Report progress by our firm against the commitments made here at least annually in public domain.

The initiative has been led by some members of the Investment Consultants Sustainability Working Groups in the UK (ICSWG-UK) and US (ICSWG-US).

It is endorsed by the United Nations Race to Zero campaign and supported by the Principles for Responsible Investment (PRI).

The commitments apply to investment advisory service and business operations. For consultants which offer discretionary asset management services, the commitments include a pledge to align with the Net Zero Asset Managers Initiative within two years

Nigel Topping, high level champion for climate action at UN Climate Change Conference (COP26) said: “We are delighted to announce the launch of Net Zero Investment Consultants Initiative. Assisting and advising asset owners to meet net zero goals through investment choices is crucial in meeting the collective decarbonisation targets. This commitment also cements their role in holding asset managers accountable on stewardship and product innovations. As part of GFANZ, we look forward to working together to make the investment process align to net zero.”

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