Daily ESG Briefing: Axa says 41% of investments are already on track for Net Zero

Axa Investment Management claims that 41% (€137bn) of its listed corporate bonds and equities holdings, and direct investments in real estate, are “on course to reach Net Zero by 2050 or sooner”. The firm, which will soon publish its interim climate targets and “new ambitious commitments”, has released the findings as part of plans for all members of the Net Zero Asset Managers Initiative (NZAMI) to share their individual progress ahead of COP26 next month. So far, Axa has pledged to exit all coal investments in OECD countries by 2030 and globally by 2040; launch more green investment products; and align at least half of its direct real estate holdings with the 1.5°C by 2025. 

Meanwhile, Rathbone Greenbank Investments has laid out its plans to become Net Zero by 2040 as part of the NZAMI plans. The UK-based asset manager has committed to reach Net Zero emissions from its own operations and supply chain by the end of the decade, using the Science-based Targets initiative’s framework. It will cut the carbon intensity of its portfolio by 60% (versus 2020) over the same period, using engagement as a central strategy. Its parent company, Rathbones Brothers, has also announced how it plans to become Net Zero across the wider business by 2050 at the latest – also by using SBTi. 

The rate of growth in climate finance has slowed over the past two years, according to a new study from the Climate Policy Initiative. Global flows hit $632bn in 2019/20, marking the highest level in history, but the rate of increase slowed compared with the previous four years. “At that tepid rate of increase we will never reach the investment levels needed this decade to avert significant economic and humanitarian harm,” said the organisation. The lion’s share of capital is going into climate mitigation projects such as renewables and green transport, the research showed.

The Central Bank of Kenya has released Guidance on Climate-Related Risk Management to help banks incorporate climate risk into their governance structures and risk management processes, and to improve disclosure on the issue. 

The McKnight Foundation has committed to achieving Net Zero greenhouse gas emissions across its $3bn endowment by 2050 at the latest, making it the largest private foundation in the US to announce a Net Zero pledge so far. Under US law, private foundations have to spend at least 5% of their endowment annually, but McKnight said more than 40% of its endowment “has some mission alignment” – with $500m committed to impact investing. “Net zero can be achieved by reducing greenhouse gas emissions in McKnight’s existing portfolio while also making new investments to build a carbon-free economy,” it said.