This commitment underlines Ninety One’s support for the objectives of the Paris Agreement and global efforts to limit global warming to 1.5°C and aligns with the United Nations Sustainable Development Goals.

The assets represented by the Initiative represent almost half of the entire asset management sector globally in terms of total funds managed. A total of 128 investors – including the world’s three largest asset managers – collectively managing $43 trillion in assets are now part of the initiative.

Signatory asset managers commit to prioritise the achievement of real economy emissions reductions, take account of material portfolio Scope 3 emissions (resulting from activities from assets not owned or controlled by the reporting organisation), create investment products aligned with net zero emissions and facilitate increased investment in climate solutions.

Therese Niklasson, Global Head of ESG at Ninety One, said: “Ninety One is excited to join the Net Zero Asset Managers initiative and share our thinking and focus around real-world decarbonisation. Our South African roots influence Ninety One’s approach to sustainability and as such we feel strongly positioned to recognise and advocate for a more inclusive and fair transition for the entire planet. The current trajectory of the global transition risks leaving behind the emerging economies. While they are not responsible for the bulk of emissions to date, they face some of the most devastating consequences.”

“Emerging market economies need time, support and financial resources to transition, yet the funding shortfall is huge, with just 20% of clean energy-investment going to these regions. Divesting from high emitting nations and sectors further expedites the problem, diverting away the capital critically needed by these economies to fund their transition. Furthermore, by placing too much emphasis on measuring a reduction in the carbon intensity of an investment portfolio – often resulting in the exclusion of the ‘worst’ culprits from portfolios – investment managers run the risk of shifting, rather than helping to solve, the problem. To succeed, the industry needs greater transparency around changes in portfolio footprints versus achieving decarbonisation in the real world.”

“By signing the Net Zero Asset Managers initiative, we are committed to working with our clients and for the global climate goals that achieve real-world emission cuts, reward improvement and progression and prevent capital being driven away from the regions that need it the most.”

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Jenny Johnson

The Franklin Templeton Investment groups and three of their affiliated specialist investment managers ClearBridge Investments, Brandywine Global and Martin Currie — are delighted to announce that they have joined the industry-leading Net Zero Asset Managers Initiative^[1]. These four signatories collectively represent more than US$948 billion in assets under management (AUM).

Launched in December 2020, Net Zero Asset Manager Initiative is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with aims for net zero emissions by 2050 or sooner. Delivery of the commitment also includes prioritising the achievement of real economy emissions reductions within the sectors and companies in which the asset managers invest.

As of today, the number of signatories consist of 128 investors who have $43 trillion in assets under management, a clear sign of the asset management industry’s recognition that climate change is an urgent priority that must be addressed.

Jenny Johnson, CEO and President of Franklin Templeton, said: “We are excited to make the commitment to the Net Zero Asset Managers Initiative alongside the growing community of signatories. We approach our journey with the clear acknowledgement that we must commit to finding the data and solutions to help us achieve global net zero emissions by 2050. We will work toward this goal in a spirit of authentic engagement and partnership with our clients and stakeholders, in keeping with our belief that good stewardship as a global asset manager means managing and allocating capital to benefit our clients across generations.”

An active manager, ClearBridge Investments is a top 20 shareholder in more than 275 public companies. Terrence Murphy, CEO of ClearBridge Investments, said: “ClearBridge is pleased to join the distinguished roster of signatories to the Net Zero Asset Managers Initiative. As stewards of our clients’ capital with a 30+ year history of integrating sustainability-related investment risks such as climate change into our stock selection process, ClearBridge recognises the urgency of accelerating the transition toward global net zero emissions. Using a partnership approach, ClearBridge will use its role as large shareholders to drive positive change through ongoing company engagement.”

Commitment to Net Zero

As part of the initiative, asset manager signatories have made nine commitments, including to:

• Set interim targets for 2030, for assets to be managed in line with the net zero goal, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate Change (IPCC) special report on global warming of 1.5°C,
• Take account of Scope 1 and 2 emissions and, to the extent possible, material Scope 3 emissions in investment portfolios,
• Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with the ambition for all assets under management to achieve net zero emissions by 2050 or sooner, and
• Create investment products aligned with net zero emissions by 2050 and facilitate increased investment in climate solutions.

Commenting on climate change as one of the greatest challenges and most defining issues of our time, Adam Spector, Managing Partner of Brandywine Global said: “Climate change is an urgent global threat and an underappreciated investment risk. Brandywine Global’s membership to the Net Zero Asset Managers Initiative underscores our commitment to assessing climate risks across capital structures and real economies. We look forward to continuing our ongoing dialogue with government officials and corporate management teams alike about the risks emanating from climate change. We are proud to be part of an initiative that we believe will positively influence the global economy and how companies operate.”

Julian Ide, CEO of Martin Currie concluded: “Martin Currie is delighted to be part of the Net Zero Asset Managers Initiative – a crucial response to improving transparency around climate risks, accelerating the adoption of net zero targets and providing a mechanism so that real-world emissions reductions are achieved. With the countdown to COP 26 in Scotland now well under way, countries are being asked to come forward with ambitious emissions reduction goals, action plans and interim targets that put us on a path for reaching net zero by 2050. To help achieve this, the asset management industry has an important role to play through its actions as long-term stewards of its clients’ assets, and is positioned to both incentivise the adoption of net zero targets and increase the flow of capital to companies providing climate solutions. As a global asset management business headquartered in Scotland, we believe we have an important platform for signalling the industry’s commitments to net zero at this critical time, and our commitment to this initiative is very much a part of that.”

Franklin Templeton’s Stewardship and Sustainability Council and the Global Sustainability Strategy Team have identified climate change as a key strategic priority for the firm and will be implementing this important agenda for change throughout the organisation, in collaboration with the internal stakeholders and clients.

Net Zero Asset Manager Initiative is managed globally by six founding partner investor networks:

• Asia Investor Group on Climate Change,
• CDP,
• Ceres,
• Investor Group on Climate Change,
• Institutional Investors Group on Climate Change, and
• UN PRI

In turn, the initiative is endorsed by The Investor Agenda, of which the investor networks are all founding partners, with the United Nations Environment Programme Finance Initiative.

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[1] Net Zero Asset Managers Initiative

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