Net Zero Asset Managers initiative now has net-zero commitments from 291 money managers with a collective $66 trillion in assets under management, said a news release Wednesday.
Of the 291 asset managers, 169 have disclosed initial targets for the proportion of assets managed in line with achieving net-zero by 2050 or sooner.
The NZAM report issued Wednesday during COP27, the U.N. climate conference, said the 68 latest asset managers disclosing targets represent a collective $21.8 trillion of the $55.3 trillion managed by firms that have set targets since the initiative launched two years ago.
The progress report described the initial targets as "only a starting point" that represents what asset managers can feasibly commit to today.
The commitments to reach net-zero by 2050 represent an average 39% of AUM, and all NZAM signatories are committing to ratchet up to eventually reach 100%, depending on client mandates, regulatory and policy environments, and development of target-setting methodologies for all asset classes, the report said. So far, most targets set cover public equity and fixed income because of available methodologies.
Reclaim Finance, a sustainable finance advocacy group, took issue with the 39% of AUM covered by NZAM commitments, up from 35% one year ago. "The minimal increase of committed AUM shows how inefficient the initiative has been in getting members to step up their ambition in line with a 1.5-degree pathway," it said in a separate statement that also criticized "widely divergent levels of ambition and methodological approaches."
Reclaim Finance noted that while a report from the U.N.'s High-Level Expert Group on Net-Zero released Tuesday confirmed "that net zero means no investments in new fossil fuels, the NZAM member targets ignore this imperative and instead mostly contain weak targets for the percentage of assets to be aligned with net zero, and huge loopholes on issues such as neglecting scope 3 emissions, and a failure to set targets based on absolute emissions," its statement said.