The Franklin Templeton Investment groups and three of their affiliated specialist investment managers ClearBridge Investments, Brandywine Global and Martin Currie have joined the Net Zero Asset Managers Initiative, representing more than USD948 billion in assets under management.
Launched in December 2020, the Net Zero Asset Manager Initiative is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with aims for net zero emissions by 2050 or sooner. Delivery of the commitment also includes prioritizing the achievement of real economy emissions reductions within the sectors and companies in which the asset managers invest.
As of today, the number of signatories consist of 128 investors who have USD43 trillion in assets under management, a clear sign of the asset management industry’s recognition that climate change is an urgent priority that must be addressed.
Jenny Johnson, CEO and President of Franklin Templeton, says: “We are excited to make the commitment to the Net Zero Asset Managers Initiative alongside the growing community of signatories. We approach our journey with the clear acknowledgement that we must commit to finding the data and solutions to help us achieve global net zero emissions by 2050. We will work toward this goal in a spirit of authentic engagement and partnership with our clients and stakeholders, in keeping with our belief that good stewardship as a global asset manager means managing and allocating capital to benefit our clients across generations.”
An active manager, ClearBridge Investments is a top 20 shareholder in more than 275 public companies. Terrence Murphy, CEO of ClearBridge Investments, says: “ClearBridge is pleased to join the distinguished roster of signatories to the Net Zero Asset Managers Initiative. As stewards of our clients’ capital with a 30+ year history of integrating sustainability-related investment risks such as climate change into our stock selection process, ClearBridge recognizes the urgency of accelerating the transition toward global net zero emissions. Using a partnership approach, ClearBridge will use its role as large shareholders to drive positive change through ongoing company engagement.”
As part of the initiative, asset manager signatories have made nine commitments, including to:
· Set interim targets for 2030, for assets to be managed in line with the net zero goal, consistent with a fair share of the 50 per cent global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate Change (IPCC) special report on global warming of 1.5°C;
· Take account of Scope 1 and 2 emissions and, to the extent possible, material Scope 3 emissions in investment portfolios;
· Implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with the ambition for all assets under management to achieve net zero emissions by 2050 or sooner; and
· Create investment products aligned with net zero emissions by 2050 and facilitate increased investment in climate solutions.
Commenting on climate change as one of the greatest challenges and most defining issues of our time, Adam Spector, Managing Partner of Brandywine Global, says: “Climate change is an urgent global threat and an underappreciated investment risk. Brandywine Global’s membership to the Net Zero Asset Managers Initiative underscores our commitment to assessing climate risks across capital structures and real economies. We look forward to continuing our ongoing dialogue with government officials and corporate management teams alike about the risks emanating from climate change. We are proud to be part of an initiative that we believe will positively influence the global economy and how companies operate.”
Julian Ide, CEO of Martin Currie, says: “Martin Currie is delighted to be part of the Net Zero Asset Managers Initiative – a crucial response to improving transparency around climate risks, accelerating the adoption of net zero targets and providing a mechanism so that real-world emissions reductions are achieved. With the countdown to COP 26 in Scotland now well under way, countries are being asked to come forward with ambitious emissions reduction goals, action plans and interim targets that put us on a path for reaching net zero by 2050. To help achieve this, the asset management industry has an important role to play through its actions as long-term stewards of its clients’ assets, and is positioned to both incentivise the adoption of net zero targets and increase the flow of capital to companies providing climate solutions. As a global asset management business headquartered in Scotland, we believe we have an important platform for signalling the industry’s commitments to net zero at this critical time, and our commitment to this initiative is very much a part of that.”
Franklin Templeton’s Stewardship and Sustainability Council and the Global Sustainability Strategy Team have identified climate change as a key strategic priority for the firm and will be implementing this important agenda for change throughout the organization, in collaboration with the internal stakeholders and clients.
Net Zero Asset Manager Initiative is managed globally by six founding partner investor networks: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change and UN PRI. In turn, the initiative is endorsed by The Investor Agenda, of which the investor networks are all founding partners, with the United Nations Environment Programme Finance Initiative.