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Managers of $16T lay out plan to decarbonize investments

Although targets to cut emissions are enshrined in the Paris Agreement, efforts by investors and companies have been stunted by a lack of consensus on the best path of action.
Although targets to cut emissions are enshrined in the Paris Agreement, efforts by investors and companies have been stunted by a lack of consensus on the best path of action.
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A group of global pension funds and investment managers, who control more than $16 trillion in assets, have drawn up a plan to cut carbon in their portfolios to net-zero.

The framework provides asset managers with a set of recommended actions, metrics and methodologies to help them meet the goal by 2050 in an effort to tackle climate change, according to the Institutional Investors Group on Climate Change, or IIGCC. The blueprint was developed with more than 70 funds worldwide.

Asset managers are under increasing pressure to reduce their carbon footprint as investors focus on sustainability and the negative effects of climate change. Although targets to cut emissions are enshrined in the Paris Agreement, efforts by investors and companies have been stunted by a lack of consensus on the best path of action.

“Countries, cities and companies around the globe are committing to achieve the goal of net-zero emissions and investors need to show similar leadership,” Stephanie Pfeifer, IIGCC‘s CEO, said in a statement.

The decade’s top performers also outpaced broader markets over the short term.
June 3

The draft framework is out for consultation until Sept. 25 and the IIGCC expects it to be finalized by the end of the year.

Impact on performance will be tested by five investors: APG Asset Management, Brunel Pensions Partnership, the Church of England Pensions Board, PKA and Phoenix Group. Analysis of the results will be published later this year.

Bloomberg News