NZAOA outlines how asset managers must work to continue winning net-zero mandates

Written by Adam Cadle

16/11/2023

Asset managers must adopt a consistent, transparent, and outcomes-oriented climate engagement strategy, which recognises that climate change poses systemic risks to asset owner portfolio returns, if asset owners are to be consistently represented, the UN-Convened Net-Zero Asset Owner Alliance (NZAOA) has argued in its latest paper.

The paper, Elevating Asset Manager Net-Zero Engagement Strategies, stated that “this alignment of engagement outcomes to portfolio management and stewardship decisions is critical for asset managers’ continued ability to win mandates of clients to net-zero”.

In the paper, the NZAOA sets out climate engagement principles, requests and practices that are applicable to all Alliance members’ asset managers, irrespective of their own climate commitments.

The key principles for asset managers to take on board, according to the paper, cover governance and integration; setting and publishing a climate engagement strategy; climate engagement practices; and transparency and accountability on climate engagement.

“In this way, the Alliance has also created a blueprint for members to render their asset manager selection, appointment, and monitoring (SAM) processes more robust by incorporating the principles, requests and practices set out in the document,” the NZAOA said.

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