Global asset manager abrdn has unveiled its target to halve its carbon intensity by 2030 versus a 2019 baseline.
The move follows the announcement of similar targets from Fidelity and Robeco last week.
Stephen Bird, chief executive of abrdn, said his firm would do more than simply move client’s money out of high-carbon intensity stocks.
“Decarbonising a portfolio is not the same as decarbonising an industry, to achieve that we need effective engagement with companies, because more seismic change will come from backing credible transition firms on their path from high to low carbon intensity,” he said.
The ‘Net Zero Directed Investing’ strategy would be delivered in three ways:
- Decarbonisation: abrdn said it was committed to tracking and reducing the carbon intensity of its portfolios, incorporating carbon analysis into the investment process and supporting credible transition leaders and climate solutions;
- Providing net zero solutions: abrdn said it was committed to increasing the proportion of assets flowing into net zero-directed investing solutions. It said around 30% of its assets under management were currently managed in line with net zero 2050; and
- Active ownership: abrdn said it was committed to voting and engaging with its investee companies to drive transition. The asset management firm said it would divest from companies where, after two years, it considered insufficient progress had been made against the transition milestones set, unless it’s not in line with the client mandate.
Bird said asset managers could not operate in a vacuum and bolder collective action by governments was desperately needed.
“Effective incentives in the form of appropriate carbon pricing are absolutely critical to enable capital allocation in line with net zero and to create an investment environment which rewards companies and investors that go green,” he said.
“We also need a proper debate and action on the role of the tax system in the transition. Pricing carbon needs to be focused on changing behaviours, and ensuring a just transition, on a national and global scale.”