Ceres

On 11 December 2020, Ceres, a sustainability nonprofit that works with investors on climate change, announced that a consortium of 30 investors managing $9 trillion in assets have committed to investing to support the goal of net zero carbon emissions by 2050.

This is what the 30 investors signed:

The Net Zero Asset Managers Commitment

In line with the best available science on the impacts of climate change, we acknowledge that there is an urgent need to accelerate the transition towards global net zero emissions and for asset managers to play our part to help deliver the goals of the Paris Agreement and ensure a just transition.

In this context, my organisation commits to support the goal of net zero greenhouse gas (‘GHG’) emissions by 2050, in line with global efforts to limit warming to 1.5°C (‘net zero emissions by 2050 or sooner’). It also commits to support investing aligned with net zero emissions by 2050 or sooner.

Specifically, my organisation commits to:

a) Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management (‘AUM’).
b) Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner.
c) Review our interim target at least every five years, with a view to ratcheting up the proportion of AUM covered until 100% of assets are included.

In order to fulfil these commitments my organisation will:

For assets committed to be managed in line with the attainment of net zero emissions by 2050 or sooner (under commitment b)

1) Set interim targets for 2030, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the IPCC special report on global warming of 1.5°C.
2) Take account of portfolio Scope 1 & 2 emissions and, to the extent possible, material portfolio Scope 3 emissions.
3) Prioritise the achievement of real economy emissions reductions within the sectors and companies in which we invest.
4) If using offsets, invest in long-term carbon removal, where there are no technologically and/or financially viable alternatives to eliminate emissions.
5) As required, create investment products aligned with net zero emissions by 2050 and facilitate increased investment in climate solutions.

Across all assets under management

6) Provide asset owner clients with information and analytics on net zero investing and climate risk and opportunity.
7) Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with our ambition for all assets under management to achieve net zero emissions by 2050 or sooner.
8) Engage with actors key to the investment system including credit rating agencies, auditors, stock exchanges, proxy advisers, investment consultants, and data and service providers to ensure that products and services available to investors are consistent with the aim of achieving global net zero emissions by 2050 or sooner.
9) Ensure any relevant direct and indirect policy advocacy we undertake is supportive of achieving global net zero emissions by 2050 or sooner.

Accountability

10) Publish TCFD disclosures, including a climate action plan, annually, and submit them to the Investor Agenda via its partner organisations for review to ensure the approach applied is based on a robust methodology, consistent with the UN Race to Zero criteria, and action is being taken in line with the commitments made here.

We recognise collaborative investor initiatives including the Investor Agenda and its partner organisations (AIGCC, CDP, Ceres, IGCC, IIGCC, PRI, UNEPFI), Climate Action 100+, Climate League 2030, Paris Aligned Investment Initiative, Science Based Targets Initiative for Financial Institutions, UN-convened Net-Zero Asset Owner Alliance, among others, which are developing methodologies and supporting investors to take action towards net zero emissions. We will collaborate with each other and other investors via such initiatives so that investors have access to best practice, robust and science based approaches and standardised methodologies, and improved data, through which to deliver these commitments.

We also acknowledge that the scope for asset managers to invest for net zero and to meet the commitments set forth above depends on the mandates agreed with clients and clients’ and managers’ regulatory environments. These commitments are made in the expectation that governments will follow through on their own commitments to ensure the objectives of the Paris Agreement are met, including increasing the ambition of their Nationally Determined Contributions, and in the context of our legal duties to clients and unless otherwise prohibited by applicable law. In some asset classes or for some investment strategies, agreed net zero methodologies do not yet exist. Where our ability to align our approach to investment with the goal of net zero emissions by 2050 is, today, constrained, we commit to embark with determination and ambition on a journey, and to challenge and seek to overcome the constraints we face.

2 Responses to Ceres

  1. Keith McClary says:

    I have seen cynicism about “net” and “offset”, such as preserving forests that were never going to be logged anyway. Their #8,9,10 seem too vague to exclude this sort of gaming of the rules.

  2. […] Today I found out about the Ceres investment management consortium from Azimuth. The big news from this organisation is that as of 11 December 2020, 30 investment managers responsible for the stewardship of 7 trillion USD in assets (in 2020 terms) have committed to this particular agreement. Essentially this amounts to a commitment to ensuring that all assets under their management are zero emission by 2050 – which implies commitment to a roadmap and vision to get there from here, sitting at the end of 2020. Furthermore, there is a recognition that committing to preventing a further 1.5C increase in temperature is very important, and this is part of this commitment. […]

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