Sunday, August 14

Large American managers do not join GFANZ

The reduction of carbon emissions it remains a global concern. But the great american managers not be finished convincing of the proposal of the GFANZ or Glasgow Financial Alliance for Zero Carbon Emissions and remain reluctant to participate, according to Alastair Marsh and Silla Brush en Yahoo Finance.

GFANZ, whose members oversee 130 trillion dollars, you’re finding that you can’t attract some of the biggest names in money management. These include Pacific Investment Management Co., Fidelity Investments, Capital Group, T. Rowe Price Group Inc., PGIM, Northern Trust Asset Management and the fund management units of Goldman Sachs Group Inc. and Morgan Stanley.

In total, the eight foreclosure firms contacted by Bloomberg News represent more than $ 17 trillion in assets, which is more than the combined gross domestic product of the European Union. When asked why they chose not to participate, they noted their fiduciary duty and its reluctance to be bound by external rules.

Mark Carney, GFANZ Co-Chair, has spent much of 2021 trying to appeal to the financial giants that direct capital flows to commit to decarbonization. He has sought to adapt his arguments to a community that focuses on lasers to make money. In a recent interview, he assured skeptics that a commitment to net zero carbon emissions need not hurt his bottom line. “Certainly not on a risk-adjusted basis,” Carney said.

But his efforts have failed in some key circles. And although he occupies a position in the Pimco advisory board, the asset manager of $ 2.2 trillion he insists that joining would be a abandonment of his fiduciary duty. (Pimco’s owner, Allianz SE, is a member of three GFANZ sub-alliances.)

Ryan Korinke, Managing Director and Global Chief Sustainability Officer, Pimco, said the firm “strongly supports initiatives related to climate and sustainability.” It also offers a ‘full range of strategies and products’ that allow you to manage clients’ money in a manner consistent with net zero objectives, ”noted Korinke, describing Pimco as“ a leader ”in incorporating environmental, social considerations. and governance in its investment process.

“However, as trustees, we do not believe it is appropriate to make specific commitments on behalf of our clients, especially given the complexity of the long-term challenges ahead,” Korinke noted. “For that reason, Pimco has not joined GFANZ.”

“Strategic Investor Mindset”

A spokesperson for Fidelity Investments, which manages $ 4.2 trillionHe said that “we very much agree with what the zero-carbon promises like GFANZ are doing.” Fidelity has “approached these issues with a thoughtful and strategic investor mentality,” and after careful consideration, the company has chosen to “do independent commitments instead of signing shared commitments“.

Capital Group, which manages 2.6 trillion dollars, is “making progress” on the same issues that GFANZ is targeting, according to Jessica Ground, Your Global Head of ESG. The firm is “aligned with the underlying objectives” of GFANZ and is “committing significant resources to assess the progression and impacts of this structural challenge,” Ground said. But so far he has also avoided the alliance.

The banking branches of Goldman Sachs y Morgan Stanley They have joined the GFANZ subgroup of banks, but the asset management units have stayed out of the alliance. A Goldman Sachs spokesman said the unit is now “actively evaluating” subscribing to the sub-alliance for asset managers and “supporting” its goals. Morgan Stanley declined to comment.

Julie Moret, Global Head of Sustainable Investment and Management, Northern Trust Asset Management, said the $ 1.2 trillion firm hopes to “move toward signing the zero net asset managers initiative.”

“However, we will only do so once our data collection and analysis is complete on how emissions cuts can best be implemented,” Moret said in an emailed statement. He added that Northern Trust already employs “many of the practices described” within the framework, and is “committed to providing transparency around our plans once data collection and analysis is complete.”

A spokesperson for T. Rowe said the firm is “actively considering” joining the initiative Net Zero Asset Managers. A spokesperson for PGIM declined to comment.

GFANZ was convened by the United Nations in April and includes six subalianzas, plus the Paris Aligned Investment Initiative. Michael R. Bloomberg, owner and founder of Bloomberg News’ parent company, Bloomberg LP, has been GFANZ co-chair together with Carney since November.

Why is Net-Zero or Zero Carbon Emission Important?

A GFANZ spokeswoman said the group has “engaged with companies across the global financial spectrum.” The alliance “would encourage anyone who is not part of GFANZ to join the race to zero and work with their peers, scientists, the UN and NGOs to accelerate the transition to a net zero carbon global economy,” he said.

Achieving net zero by 2050 is crucial for Limit the average temperature rise to 1.5 degrees Celsius. If humanity does not meet the moment, the planet faces a potentially catastrophic trajectory of overheating, the UN warned.

“It is important that some of the world’s largest asset managers refuse to act on climate change and continue to actively exacerbate the climate crisis,” he said Colin Baines, Investment Engagement Manager, Friends Provident Foundation, a charity that uses your endowment to push for a fairer situation. and more sustainable economy.

He called fiduciary concerns raised by some companies “an excuse” for inaction. “There is nothing to stop asset managers from adopting minimum standards or acting responsibly. It’s completely about the will to do it. “

A study conducted by ShareAction, a UK non-profit organization, found that even asset managers who have joined high-profile climate alliances, such as GFANZ, do not put significant pressure on portfolio companies to upgrade. The analysis identified Vanguard Group Inc. y State Street Corp. lagging behind their peers; The two voted in favor of resolutions aimed at protecting the environment only 40% of the time, compared to an average of 70% for members of the climate change group Net Zero Asset Managers Initiative.

While some climate activists have criticized GFANZ for being a toothless brand exercise (Reclaim Finance called it “all talk, zero net action”), few question the critical need to achieve climate neutrality by 2050.

The more than 450 GFANZ signatories representing the 40% of global financial assetsincluding BlackRock Inc., JPMorgan Chase & Co., and Citigroup Inc., have promised to use scientific guidance to achieve net zero carbon dioxide emissions by mid-century, and to provide interim targets by 2030.

While GFANZ is a voluntary alliance with no compliance mechanism, the UN has said it is working on a framework to monitor net zero carbon targets that will help ensure that those who make such promises are held accountable.

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