The Net Zero Asset Managers initiative (NZAM) “has very little choice” other than to temporarily suspend its activities following mounting pressure in the US and the departure of the world’s largest asset manager, BlackRock. This is according to a statement published by CCLA Investment Management, a founding signatory of the net zero group. “CCLA was, and remains, proud to be a founder signatory of NZAM,” the statement said. “We are disappointed with the decision by NZAM to suspend its activities, but after meeting with the NZAM secretariat team, we understand that they had very little other choice.” The asset manager reiterated its commitment to addressing the societal and financial risks associated with climate change and confirmed it would be “participating fully” in the NZAM consultation, outlining some initial recommendations. “First, we believe the sector needs to be resolute that climate risk is long-term financial risk,” CCLA said. “We cannot cave to pressure to be quiet, instead we should review options together.” Although this may mean asset managers most impacted by the anti-ESG movement choose not to participate in the alliance any longer, CCLA said this “should not stop those that can”. In addition, it recommended ensuring that the alliance has a real-world focus, with increased flexibility in how asset managers can contribute to global decarbonisation. “Different firms will be able to push for change in different ways, depending upon their asset classes, positioning, and processes,” the statement said. Thirdly, CCLA acknowledged that the 1.5°C goal “seems further and further from the path that we are on”. As such, it is highly likely that a future NZAM will need to carefully consider different decarbonisation scenarios. “A new NZAM will have to encourage asset managers to work much more closely with asset owners,” CCLA added.
