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Low Share of Net Zero Assets Among NZAM Members

A global survey of ESG practices has found only a fraction of assets are currently managed in alignment with net zero objectives by members of the Net Zero Asset Managers (NZAM) initiative. Russell Investments’ 2023 Manager ESG Survey of 169 managers, with US$20 trillion AUM collectively, found that 27% of respondents had committed to NZAM, while 6% of indicated they plan to sign up in the next 12 months. Among current NZAM signatories, 35% of managers reported current net zero assets equal to or less than 14% of their total AUM, with 28% managing more than half of assets in alignment with net zero objectives. A total of 13% of managers are already managing 80-100% of assets in alignment. Two thirds said that their 2030 interim targets are to reach 50% or more of AUM in line with net zero by 2030. According to Russell Investments, the Paris Aligned Investment Initiative’s Net Zero Investment Framework is widely preferred for establishing targets among survey respondents. Only 7% of all survey respondents said that ESG factors do not drive investment decisions, down from the 22% recorded in 2022. “We believe this reflects a deepening recognition that ESG issues — encompassing areas such as climate risk and labour relations — are financially material,” said Kris Tomasovic Nelson, Senior Director, Head of ESG Investment Management, Russell Investments.

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