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Background
There are many strands of activity in Government and industry which focus on climate change. Over the course of the past 12 months, one that has taken particular prominence – and been repeatedly pushed by the Government in the UK – is the Race to Zero.
This was launched more than 12 months ago to act as a counterpart to the net zero commitments which have been made by national governments since the Paris Agreement was signed in 2015, if not even earlier.
The Race to Zero is a UN-led umbrella initiative for net zero climate change initiatives involving non-state actors. This includes cities, large corporates, small businesses, charities and parts of the financial services industry, among many others.
Following the launch of Race to Zero last summer, the industry launched its own commitment – the Net Zero Asset Managers initiative – in December.
In the following January, the COP26 President launched Race to Zero Breakthroughs and set a target – of 20% global AUM – to make a net zero commitment. In speeches and engagement since, Ministers have said that ‘making a net zero commitment’ is the first, and most significant, expectation they have of the industry.
Background
The IA is particularly proud to support members signing up to the Net Zero Asset Managers initiative and the Race to Zero and to date investment managers with more than £5.6trn of assets under management in the UK have made these net zero commitments.
This represents 66% of the AUM in the UK and is well in excess of the Race to Zero Breakthrough which Alok Sharma set for the industry back in January.
We are also pleased that the IA was named in July as the first official supporting partner organisation to the Net Zero Asset Managers initiative. By becoming a supporting partner organisation of NZAM, the IA is formalising a commitment we made with the full support of the Board to support the Race to Zero, the Net Zero Asset Managers initiative and any members considering becoming signatories.
Understanding the Net Zero Asset Managers initiative
Listen back to our webinar with the COP26 Private Finance team and IIGCC recorded on 17 May 2021. The webinar provides an overview of the Net Zero Asset Managers initiative and covers the key requirements and benefits for investment managers joining the initiative, how the initiative operates, and how investment managers can join.
IA Net Zero Forum
The IA is developing further plans to support members who are making this commitment through the creation of a dedicated IA Net Zero Forum. We hope this will enable peer-to-peer knowledge sharing and provide a platform for all IA members to raise questions and find solutions in their journey to net zero.
We are currently seeking expressions of interest in joining the Net Zero Forum and would like to understand the issues, relating to both investments and operations, where members would find it useful for the forum to focus its attention. If you are interested in joining the Net Zero Forum please contact Paul Scaping.
Document library
IA publications
IA Position on Climate Change (Nov 2020)
The Path to Net Zero: investing in a carbon neutral future (Nov 2020)
Government, regulatory and policymaker publications
Progress in Reducing Emissions, the UK Climate Change Committee's report to Parliament (June 2021)
Transforming our Systems Together, a Race to Zero Breakthroughs special paper (Jan 2021)
Net Zero Review: Interim Report, HM Treasury (Dec 2020)
The Paris Agreement, UNFCCC treaty (Dec 2015)
IA consultation responses
Treasury Committee inquiry on Decarbonisation and Green Finance: IA written evidence (Aug 2020); Final Report (Apr 2021); Government response (July 2021)
IA circulars
312-21: IA Net Zero Forum (21 July 2021)
211-21: FCA Survey on Net Zero (20 May 2021)
Last update: August 2021
