{"id":21800,"date":"2022-05-25T17:47:35","date_gmt":"2022-05-25T15:47:35","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=21800"},"modified":"2023-02-08T13:38:37","modified_gmt":"2023-02-08T12:38:37","slug":"3-key-elements-to-assess-asset-managers-climate-plan","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2022\/05\/25\/3-key-elements-to-assess-asset-managers-climate-plan\/","title":{"rendered":"3 key elements to assess asset manager’s climate plan"},"content":{"rendered":"

Almost all big asset managers worldwide are now members of the Net Zero Asset Manager initiative (NZAM), the largest sectoral alliance gathering financial institutions to head towards net zero (1). Members are committed to halve their financed emissions by 2030 (2). A progress report is expected to shortly be released by NZAM, with information from asset managers on their targets and how they intend to reach them. In this blog post Reclaim Finance lists the key criteria for credible and robust decarbonization strategies by asset managers, including a closer look at key problems with the targets recently published by AXA IM, BlackRock and State Street.
\n<\/b><\/span><\/p>\n<\/div><\/div><\/div>

NZAM\u2019s second progress report is supposed to be released in the coming weeks. It will\u00a0 include the targets and strategies of the largest asset managers worldwide, including BlackRock, State Street, and (the notoriously opaque) Vanguard in the US, as well as AXA IM and Amundi in Europe. The quality of their plans will be a key indicator of how serious these supposedly net zero-committed asset managers actually are about meeting their obligations<\/b>.<\/p>\n<\/div>

<\/div><\/div><\/span>

Decarbonizing portfolios: analysis grid<\/h1><\/span>
<\/div><\/div><\/div>

We list below 3 key areas that should be analyzed when assessing the credibility of decarbonization targets<\/b> and related implementation plans: ambition, alignment and implementation (3). The table provides an analysis grid (see details below the table) for recent announcements by AXA IM, BlackRock and State Street Global Advisors<\/b> (SSGA). Vanguard\u2019s interim target was not publicly available at the time of analysis.<\/p>\n

For example, on BlackRock\u2019s ambition:<\/i><\/b><\/p>\n

BlackRock announced<\/a><\/u> a very vague \u201cexpectation\u201d that in 2030 the majority of its portfolio would be invested in companies with science-based targets. Setting the expectation that investee companies will adopt science based targets is far from enough \u2014 especially if there are no consequences implemented if they don\u2019t. Furthermore, BlackRock\u2019s goal is set for 2030 – but no intermediary milestones have been set to ensure that its investee companies are acting before 2030. Nothing requires them to actually cut emissions this decade, the crucial decade for climate action, let alone to halve them by 2030.<\/p>\n<\/div>\n

\n\n\n\n\n\n\n\n
Asset manager<\/th>\nAmbition<\/th>\nAlignment<\/th>\nImplementation<\/th>\n<\/tr>\n<\/thead>\n
AXA IM<\/a><\/u> (4)<\/td>\n While the commitment is overall ambitious and includes targets for 2025 covering all eligible assets, Scope 3 emissions of the heavy emitters are not included. Furthermore, no absolute reduction target has been set.<\/td>\n AXA IM plans to swiftly exit coal but its demands\u00a0 for oil and gas companies are not yet science-based, clearly formalized and timebound (5).<\/td>\n AXA IM recognizes its responsibility to achieve an overall 50% decrease in emissions by 2030; but the process by which it will achieve this must be clarified.<\/td>\n<\/tr>\n
BlackRock<\/a><\/u><\/td>\n BlackRock has not committed to cutting its financed emissions \u2014 it has only set an\u00a0 \u201cexpectation\u201d for its investees to adopt targets by 2030. It does not even expect them to take action before then.<\/td>\n BlackRock has no policies to stop supporting coal, oil and gas expansion. Its requests to fossil fuel sector investees are not clearly formalized and timebound.<\/td>\n BlackRock hasn\u2019t committed to halving portfolio emissions by 2030 and does not recognize the need to restrict investments for the worst companies.<\/td>\n<\/tr>\n
SSGA<\/a><\/u><\/td>\n SSGA has set targets for when its assets will need to be \u201cnet-zero aligned\u201d but gives no definition of what this means and has not set an absolute reduction target for its overall portfolio emissions.<\/td>\n SSGA has no policies to stop supporting coal, oil and gas expansion. Its requests to fossil fuel sector investees are not clearly formalized and timebound.<\/td>\n SSGA has a commitment to halve portfolio emissions by 2030 but only on a small subset of its portfolio. It does not recognize the need to restrict investments in the worst companies.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
<\/div>
<\/div><\/div><\/span>

More details on our analysis grid for robust asset manager decarbonization plans:<\/h1><\/span>
<\/div><\/div><\/div>

AMBITION: Is the ambition of the targets sufficient?<\/p>\n