Private market asset managers should "raise their level of climate ambition," an institutional investors inititive with a collective $11 trillion under management said in a call to action issued Nov. 24.
The U.N.-convened Net-Zero Asset Owner Alliance represents 82 asset owners that have committed to transitioning their investment portfolios to net-zero greenhouse emissions by 2050.
To fulfill those commitments, "decarbonization of private assets is crucial," the group said in a news release.
"While unmitigated climate change presents an existential risk to the core business of asset owners, private markets are well-positioned to contribute to risk management. Therefore, this latest call to action is meant to encourage all asset managers (and especially those that are yet to sufficiently address climate risk) to raise their level of climate ambition," it said.
Asset managers in private markets should represent their clients' long-term interests by integrating climate change considerations across all business activities, including investment decisions, said NZAOA. It recommended specific actions for each asset class on topics ranging from asset managers' governance structure and disclosure on portfolio greenhouse gas emissions, to financing climate transition investments.
While private asset managers take diverse approaches to climate change, "each of these approaches should have the interests of their asset owner clients at the core and should meet their clients' minimum expectations," said Patrick Peura, co-lead of the group's engagement track and ESG engagement manager for Allianz SE, in the release.