Geneva, 16 November October 2023 – For asset owners, aiming to both achieve net-zero greenhouse gas (GHG) emissions in their portfolio by 2050 and a focus on real-economy outcomes, the relationship to their asset managers is crucial. To create a foundation for asset owner expectations of asset managers, the UN-convened Net-Zero Asset Owner Alliance publishes the Elevating Asset Manager Net-Zero Engagement Strategies discussion paper.
In the paper, the Alliance sets out climate engagement principles, requests and practices that are applicable to all Alliance members’ asset managers, irrespective of their own climate commitments. The paramount importance of aligning asset managers’ engagement to their clients’ net-zero goals is defined clearly:
“Asset managers must adopt a consistent, transparent, and outcomes-oriented climate engagement strategy, which recognises that climate change poses systemic risks to asset owner portfolio returns. This alignment of engagement outcomes to portfolio management and stewardship decisions is critical for asset managers’ continued ability to win mandates of clients committed to net-zero.”
The key principles for asset managers to take on board cover the following:
- Governance and integration;
- Setting and publishing a climate engagement strategy;
- Climate engagement practices; and
- Transparency and accountability on climate engagement.
Each of the principles is accompanied with a list of clear and detailed expectations on how to deliver on them. In this way, the Alliance has also created a blueprint for members to render their asset manager selection, appointment, and monitoring (SAM) processes more robust by incorporating the principles, requests and practices set out in the document.
With this paper on expectations of asset manager climate engagement, the Alliance has completed its series of knowledge products on stewardship. Alliance members and net-zero investors alike should also consult the complementary discussion papers on Elevating Climate Diligence on Proxy Voting Approaches and Aligning Climate Policy Engagement with Net-Zero Commitments.
About the UN-convened Net-Zero Asset Owner Alliance
The UN-Convened Net-Zero Asset Owner Alliance (the Alliance) is a member-led initiative of 86 institutional investors, with US$9.5 trillion in assets under management, committed to transitioning their investment portfolios to net-zero GHG emissions by 2050. The Alliance members were the first in financial industry to set intermediate targets (aligned with the Paris Agreement schedule) and they report on their progress annually. The Alliance is convened by UNEP FI and PRI, and is supported by WWF and Global Optimism.
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