Investment consultants launch net-zero initiative

22nd September 2021

A group of 12 leading investment consultancy firms, which advise organisations managing around $10trn (£7.3trn) in assets, have launched a new initiative to help deliver net-zero emissions by 2050.

Members of the Net Zero Investment Consultants Initiative (NZICI) have committed to nine actions to support global decarbonisation by 2050, such as integrating advice on net-zero alignment into all investment consulting services within two years.

They include Barnett Waddingham, bfinance, Cambridge Associates, Cardano, Frontier, Hymans Robertson, JANA, Lane Clark & Peacock, Meketa, Redington, Willis Towers Watson and Wilshire.

These firms play a crucial role within the savings and investment ecosystem by providing strategic advice on asset allocation to pension funds, sovereign funds and insurers, as well as broader education on climate risks and opportunities.

Their commitments have been designed to facilitate alignment with the UN-convened Net-Zero Asset Owner Alliance, the Net Zero Asset Managers Initiative and other signatories of the Race to Zero campaign.

“A systemic change like net zero can only be achieved by working together with other organisations – to go further and faster to build a sustainable future,” said Alex Pocock, head of investment consulting at Barnett Waddingham.

“Sustainability is about moving forward and meeting the needs of the present without jeopardising future generations. Joining this initiative means cementing our commitment to working with others across our industry and beyond to solve the complex, systemic problems of climate change.”

As members of the NZICI, the 12 investment consultancy firms have committed to:

  • Integrate advice on net-zero alignment into all investment consulting services as soon as practically possible and within two years of making this commitment
  • Work with clients to identify the investment risks from climate change, highlight the importance of net-zero alignment and, where applicable, support clients in developing policies that align their portfolios to a net-zero pathway
  • Support efforts to decarbonise the global economy by helping clients prioritise real economy emissions reductions, reflecting the target of 50% global emissions reduction by 2030 or sooner using existing decarbonisation methodologies
  • Assess and monitor asset managers on the integration of climate risks and opportunities in their investment decisions and stewardship and reflect this evaluation in client recommendations
  • Align with the Net Zero Asset Manager Initiative as soon as practically possible and within two years of making this commitment
  • Set emissions reduction targets across all operational emissions in line with 1.5°C scenarios
  • Where suitable net-zero methodologies do not exist, work collaboratively for the benefit of clients to address these challenges, seeking harmonised methodologies
  • Engage with regulators and policymakers to facilitate the transition to net-zero carbon emissions, addressing any barriers to clients adopting and achieving their net-zero targets
  • Report progress against the commitments at least annually in the public domain.

Ahead of the COP26 climate summit in Scotland in November, members of the NZICI will also work together with other signatories of net-zero initiatives as a member of the Glasgow Financial Alliance for Net Zero (GFANZ).

“We are delighted to announce the launch of the NZICI,” said Nigel Topping, high level champion for climate action at COP26. “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.”

Image credit: iStock

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