Net Zero sometime: NZAM scraps 2050 target

The Net Zero Asset Managers Initiative (NZAM), a voluntary coalition of asset managers committed to tackling climate change, has announced a significant overhaul of its commitment statement. The group, launched in 2020 to provide a platform for voluntary climate commitments across the asset management industry, was forced to suspend its activities in January after its largest member, BlackRock, withdrew support.

BlackRock’s exit came amid rising litigation risks. In November 2024, a coalition of 13 Republican-led states filed an antitrust lawsuit against BlackRock and several other major managers, accusing them of conspiring to reduce coal production and raise energy prices through their climate policies.

At its peak, NZAM counted more than 325 asset manager members overseeing $57.5trn in assets. When the suspension was announced, the group said it would enter a consultation process to ensure it remained “fit for purpose in the new global context.”

Ambitions pared back

That process has now concluded, with NZAM releasing updated guidance for members. Based on feedback from both signatories and non-signatory firms, as well as asset owners, the alliance said it aimed to balance ambition with “global inclusivity”.

However, the new mission statement appears notably less ambitious. Whereas the original pledge committed signatories to supporting the goal of net zero greenhouse gas emissions by 2050, the updated version confirms that references to 2050 have been removed “to reflect diverse jurisdictional realities and accommodate signatories from a wider range of markets.”

The timing of the change comes as the UN secretary general, António Guterres, warned that humanity had “failed” to limit global warming to 1.5°C, in an interview with The Guardian and Sumaúma, just weeks ahead of the COP30 climate summit in Brazil.

Campaign criticism

Climate campaigners have criticised NZAM’s revised position, arguing that the group’s new framework renders its commitments “close to meaningless.”

Laure Philippon, head of investor engagement at ShareAction, said: “It’s seriously disappointing to see NZAM dialling down its efforts with proposed changes to its commitment statement.

“Asset managers who are serious about tackling the climate crisis must urge NZAM to stick to its original pledge. Unless membership is tied to real and bold action, asset managers using NZAM to greenwash their activities will continue riding on the coattails of those willing to act. This will make it harder for asset owners to tell the difference between managers who are, and aren’t, serious about preventing the worst effects of global heating,” she added.

Reclaim Finance’s net zero researcher, Christophe Etienne, said the changes confirmed a wider disengagement by the financial sector and a weakening of net-zero alliances.

“This is bad news for asset owners, particularly pension funds, who will now have to redouble efforts to identify managers that take their fiduciary duty seriously by integrating climate risk and staying the course when political headwinds intensify,” he warned.

A market opportunity

While NZAM’s revised statement marks a sharp pivot away from collaborative stewardship efforts—an aspect particularly vulnerable to antitrust scrutiny in the US—the alliance nonetheless sought to underline the investment opportunity.

It predicts that the market for climate-related investments could expand from around $2trn today to more than $60trn by 2050. “Being a signatory to NZAM helps asset managers demonstrate how they are positioning for and seizing these opportunities, while managing climate-related financial risks on behalf of their clients,” the statement said.

To reinforce that message, NZAM published supportive responses from major asset owners including Brunel Pension Partnership, the Church of England Pension Board, Aéma Groupe and the New York City Comptroller. 

Aéma Groupe, NYCERS and Church Commissioners for England are members of the Net Zero Asset Owner Alliance.

Brad Lander, New York City Comptroller, reiterated the need for climate ambition among asset managers: “As we experience the increasing harms of climate change on people and the economy globally, we need asset managers to play their part to mitigate climate change and protect long-term investment returns.”

Laura Hillis, managing director of responsible investment at the Church of England Pension Board, added: “We are looking to our asset managers and the wider investment sector to play a constructive and proactive role in addressing climate risk and realising transition-related investment opportunities. We see participation in the Net Zero Asset Managers initiative as key to this – it provides industry best practice tools and frameworks, and helps lift standards across the investment industry, which leads to better long-term outcomes for the economy than everyone ‘going it alone’.”

Despite growing political pressure in the US, many asset managers now see climate leadership as an opportunity rather than a liability. Speaking on the sidelines of Net Zero Investor's Annual Conference last week, asset managers reported that they now pick up mandates that five years ago would have been awarded to the largest US firms. 

A research note by JP Morgan circulated this summer found that two-thirds of the world’s largest asset owners remain committed to integrating climate considerations into their investment strategies, with many actively seeking managers aligned with their long-term climate vision.