Managers of $16 Trillion Set Out Plan to Decarbonize Investments

(Bloomberg) --

A group of global pension funds and investment managers, who control more than $16 trillion in assets, have drawn up a plan to cut carbon in their portfolios to net-zero.

The framework provides asset mangers with a set of recommended actions, metrics and methodologies to help them meet the goal by 2050 in an effort to tackle climate change, according to the Institutional Investors Group on Climate Change, or IIGCC. The blueprint was developed with more than 70 funds worldwide.

Asset managers are under increasing pressure to reduce their carbon footprint as investors focus on sustainability and the negative effects of climate change. Although targets to cut emissions are enshrined in the Paris Agreement, efforts by investors and companies have been stunted by a lack of consensus on the best path of action.

“Countries, cities and companies around the globe are committing to achieve the goal of net-zero emissions and investors need to show similar leadership,” Stephanie Pfeifer, IIGCC‘s chief executive officer, said in a statement.

The draft framework is out for consultation until Sept. 25 ad the IIGCC expects it to be finalized by the end of the year.

Impact on performance will be tested by five investors: APG Asset Management, Brunel Pensions Partnership, the Church of England Pensions Board, PKA and Phoenix Group. Analysis of the results will be published later this year.

©2020 Bloomberg L.P.