Fidelity, UBS Join Investors Making $9 Trillion Net-Zero Pledge

A group of 30 asset managers overseeing a combined $9 trillion of assets said they will support efforts to limit global warming by running carbon-neutral investment portfolios by 2050 or sooner.

Fidelity International, Legal & General Investment Management and UBS Asset Management are among the founding members of the Net Zero Asset Managers initiative. The group has committed to collaborate on decarbonization goals with pension fund and insurance clients and to set a target for the proportion of their assets that in 10 years’ time will be managed in line with achieving net-zero emissions by 2050, according to a statement Friday. The managers plan to review their targets every five years or less.

Mobilizing financial markets to support the transition to a lower-carbon world was among the key goals of the 2015 Paris climate accord, which saw governments pledge to limit global warming to no more than 1.5 degrees Celcius above preindustrial levels. That was a catalyst for many of the world’s largest financial firms to embrace sustainability and an investing style that considers environmental, social and governance issues when allocating capital. Still, they will need to do much more if the Paris goals are to be realized.

“This is a welcome step from the asset-management community,” said Peter Uhlenbruch, head of investor standards at ShareAction in London. “But the real test will be how quickly signatories translate ambition into action by escalating their engagement with companies.”

The investor group has the “financial firepower” to make “real progress towards a net-zero and resilient future,” said Stephanie Pfeifer, chief executive officer of the Institutional Investors Group on Climate Change and founding partner of the new asset-manager initiative. Other managers in the pack include Axa Investment Managers, BMO Global Asset Management, DWS, M&G Plc and Wellington Management. The group said it expects others to sign up in coming months.

The 30 initial members committed to ensure their engagements with companies and their votes for corporate board directors will be consistent with the 2050 net-zero ambition. They also pledged to create investment products aligned with the emissions target and facilitate “increased investment in climate solutions.”

“Climate change poses one of, if not the most, significant risks to the long-term profitability and sustainability of companies, including our own,” said Anne Richards, Fidelity International’s CEO, in a statement.

Pension funds and insurers convened by the United Nations last year have also pledged to erase the carbon footprint of their investments. The Net-Zero Asset Owner Alliance, which includes Allianz SE and the California Public Employees’ Retirement System, said in October that its members will reduce the emissions of their equity, corporate bond and real estate investments by 16% to 29% from 2019 levels by 2025.

©2020 Bloomberg L.P.

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