BlackRock among 43 more signatories to Net Zero Asset Managers initiative

In a short time, the Net Zero Asset Managers initiative has secured the commitment of many big-name investors and it has been announced that the signatories of 36% of the global total assets under management (AUM) are included. The scheme was launched in December 2020 with the aim of galvanising the asset management industry to a goal of net zero emissions by 2050 or sooner.

It specified that participants would:

1. Work in partnership with asset owner clients on decarbonisation goals consistent with reaching net zero by 2050 or sooner across all AUM.

2. Set an interim target for the proportion of AUM in line with reaching net zero by 2050 or sooner.

3. Review the interim target at least every five years whilst increasing the proportion of AUM covered until full coverage is reached.

The initiative is managed by six founding partners:

• Asia Investor Group on Climate Change (AIGCC);

• Carbon Disclosure Project (CDP);

• Ceres;

• Investor Group on Climate Change (IGCC);

• Institutional Investors Group on Climate Change (IIGCC);

• Principles for Responsible Investment (PRI).

At the time of launch, the initiative was supported by 30 signatories including the asset management divisions of AXA, BMO, Fidelity International, Handelsbank, Legal & General and Schroders. Collectively, these 30 signatories represented more than $9tn of AUM.

On March 29th, an update was provided which said that since the launch a further 43 signatories had joined the initiative with the world’s two largest asset managers – BlackRock and The Vanguard Group – among them. Other sector heavyweights joining up included Allianz Global Investments, Aviva, Invesco, Danske Bank, Lazard, Macquarie and Standard Life Aberdeen.

The signatories now represent $32tn in AUM and the initiative has been accredited by the UN’s Race to Zero campaign with Nigel Topping, UK high level climate champion for COP26, describing the news as “the first critical breakthrough for the Race to Zero” and adding that “this momentum must continue to finance the transition to a zero carbon economy”.

Receiving a pledge from BlackRock is a significant step for the initiative as the American multinational investment corporation manages about $7tn in AUM. It was revealed in January that they still held a fossil fuel portfolio worth $87bn. Larry Fink, CEO of BlackRock, said that “helping investors prepare their portfolios and capture investment opportunities on the path to net zero is one our greatest responsibilities. BlackRock is proud to put its name behind this initiative”.

That commitment seems particularly timely in view of comments made by Tariq Fancy, former chief investment officer for sustainable investing at BlackRock, in an interview with The Guardian. Fancy now runs a digital learning non-profit group and decreed that the climate crisis “can never be solved by today’s free markets…because the system is built to extract profits”.

His suggestion was immediately disputed by his former employers who said: “Sustainable investing can deliver strong investment returns while also helping to address urgent social and environmental concerns”.