Almost one third of US institutional investors investing in strategies supporting carbon-neutral economy transition

Written by Adam Cadle

14/02/2024

Nearly one third (30%) of US institutional investors are investing in strategies that support transition to a carbon-neutral economy, Cerulli has said, and another 36% plan to over the next 12 months.

Additionally, half of institutions are either divesting (29%) or plan to divest (21%) from fossil fuels. When undertaking responsible investment strategies, institutions continue to prioritise the issue of climate change (61%) as the top theme.

Cerulli also found that while just 14% of US asset owners have a formal net-zero commitment, another 25% plan to make one in the next 12 months.

Despite these efforts, investors continue to face difficulties analysing and reporting on the carbon footprint of their underlying investment portfolios. New platforms, including the Net-Zero Data Public Utility (NZDPU) database, are expected to come to market to establish more reliable, accessible, and comparable climate data across various industries for investors.

“The development of such platforms will provide investors with more complete information about their exposure to climate-related financial risk,” Cerulli analyst Gloria Pais stated.

“Looking ahead, Cerulli anticipates an increase in industry partnerships with current disclosure platforms to enhance consistency and provide managers, investors, and other industry professionals with the data they need.”

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