The Net Zero Asset Managers (NZAM) global collective has halted operations just one week after BlackRock resigned the voluntary organisation.
In a statement, NZAM says it had suspended “activities to track signatory implementation and reporting” while a formal review process takes place.
“NZAM will also remove the commitment statement and list of NZAM signatories from its website, as well as their targets and related case studies, pending the outcome of the review,” the release says.
Founded in 2020, NZAM claimed 325 signatories – including several NZ members – with combined assets under management of US$57.5 trillion prior to the BlackRock resignation: the world’s largest fund manager oversees about US$11.5 trillion.
BlackRock quit NZAM amid a political backlash in the US against environmental, social and governance (ESG) influence on investments that saw – among other incidents – BlackRock, Vanguard and State Street slapped with a lawsuit alleging ‘cartel’ behaviour to rig the coal market.
“Recent developments in the U.S. and different regulatory and client expectations in investors’ respective jurisdictions have led to NZAM launching a review of the initiative to ensure NZAM remains fit for purpose in the new global context,” the statement says. “Signatories will be consulted throughout the review process and informed of any updates in a timely and transparent fashion.”
In an earlier note, NZAM said it was “disappointed” about BlackRock’s exit but respected “any individual decisions signatories take”.
The initiative was formed to help fund managers contribute to the global goal of net zero carbon emissions by 2030 “or sooner”.
“NZAM has successfully supported investors globally as they have sought to navigate their own individual paths in the energy transition in line with their fiduciary duties and clients’ long-term financial objectives,” the release says. “NZAM looks forward to continuing to play this constructive role with investors around the world.”
The current NZAM Advisory Group includes a couple of Australian representatives: Kate Turner, global head of responsible investment for First Sentier; and Alison Chan, sustainable finance specialist for private credit manager, Metrics.
Last November, NZAM chair, Rebecca Mikula-Wright, said in a release that more than 80 per cent of signatories had “been engaging with investees on climate as a material issue”.
Mikula-Wright said “73% reported contributing to increased net zero ambition and action of their investees, and 46% said their actions contributed to real-economy emission reductions by portfolio companies”.