The Net-Zero Asset Managers (NZAM) initiative has been in hibernation since January. The group suspended its activities after investment giant BlackRock left the group. At the time, the group said it launched a review of its practices and was consulting signatories on the best path forward. Now the group put forward a proposal significantly reducing the level of commitment of its signatories. Responsible Investor writes:
“The proposed new commitment retains a reference to ‘efforts to limit the temperature increase to 1.5C’ but adds mention of ‘holding the increase… to well below 2C… in line with the stated goals of the Paris Agreement’. There is no reference to 2050, which was mentioned 13 times in the original text.”
With the change in focus to 2C, signatories would also commit to investing aligned with net zero. However, specific assets under management requirements have been removed. Additionally, firms are no longer required to set emissions reduction targets for 2030. A number of other requirements have been dropped entirely or reduced significantly. NZAM signatories have the next three months to review the amended commitments. NZAM’s actions are very reminiscent of the Net Zero Banking Alliance (NZBA). The NZBA also struggled after hemorrhaging membership. Like the NZAM, they also tried to loosen requirements and membership rules. Ultimately, these rule changes did little to please the NZBA’s signatories, and the group announced an end to its operations, restructuring earlier this year. Climate pacts and alliances have become a prime target for anti-ESG, making it difficult for the organizations to retain membership. We’ll see if NZAM has more luck with loosening its requirements.
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