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Morningstar finds ‘varying levels of commitment’ on setting net zero emission targets among world’s top fund managers

  • Vanguard, the world’s second-largest fund manager, has committed only 4 per cent of assets under management to be managed in line with net zero emissions
  • Paris-based Mirova is among a handful of asset managers which has committed 100 per cent of its assets in line with net zero emissions

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The commitment among the world’s top fund managers to setting net zero emission targets differs greatly. Photo: Reuters
Martin Choi

The level of commitment to setting net zero emission targets varies vastly among the world’s leading asset management firms, according to funds researcher Morningstar, which is causing confusion among investors and has raised questions about their reliability.

Less than a fifth of the 43 asset managers that disclosed their net zero commitments in the latest progress report of the Net Zero Asset Managers Initiative (NZAMI) had set absolute emission reduction targets, analysis by Morningstar showed. Around a third did not set emissions-reduction targets, but said they aimed to invest a portion of their assets in issuers with science-based targets.
The NZAMI is committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner to limit global warming to 1.5 degrees Celsius. The list of signatories now stands at 273, with US$61 trillion in assets under management (AUM).

“A wide range of approaches to setting net-zero targets has produced what appears to be varying levels of commitment across managers, leading to investor confusion,” said Hortense Bioy, Morningstar’s global director of sustainability research on Monday.

The Vanguard Group, the world’s second largest fund manager, is among 10 firms that have failed to make companywide policies on coal and other fossil fuel investments. Photo: Reuters
The Vanguard Group, the world’s second largest fund manager, is among 10 firms that have failed to make companywide policies on coal and other fossil fuel investments. Photo: Reuters

The initial commitments by the investment managers ranged from allocating 4 per cent to 100 per cent of total AUM, according to Morningstar.

Only nine managers, including Paris-based Mirova, had committed 100 per cent of their assets towards net zero alignment, while 15 committed less than 50 per cent.

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