Engaging on “net zero” with asset managers

There are significant differences in how managers are approaching the challenge.

Aerial view through clouds of  windfarm on pastures.

The Net Zero Asset Manager (“NZAM”) initiative was launched in December 2020 and brings together international asset managers committed to aligning their investment activities with the goal of net zero emissions by 2050 or sooner. Since the launch, the economic and political landscape has shifted dramatically. Russia’s invasion of Ukraine led to a surge in energy prices and prompted many countries to focus on energy security, accelerating the energy transition. At the same time, the politicisation of climate change, particularly in the US, has made net zero an increasingly challenging topic for investors to navigate.

To better understand how asset managers are navigating the challenges of decarbonising portfolios, we engaged with 21 managers that we invest with. Together, these organisations are responsible for £27 trillion of assets under management (“AUM”). 77% are signatories to the NZAM initiative.

We share below the key takeaways from these engagements.

  1. Where a manager believes their fiduciary duty lies is the biggest factor in determining how much AUM, if any, they are willing to commit to net zero. We have seen a clear divide between managers operating in the US and Europe.
  2. Educating clients is key. Managers need to be able to provide clients with the tools, data and resources to understand climate risks in order to help them make informed decisions on their investment preferences.
  3. Managers need to be able to give clients products aligned with net zero in the form that they prefer.
  4. Engaging with underlying companies is the preferred tool for decarbonising portfolios. We encourage managers to focus on targeting the top emitters and putting engagement policies in place with clear, time-bound targets.

To read more, download the full article here.

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.



In Focus
Climate Change
Market views
Energy transition

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.