Fund managers are being urged to actively invest in solutions to tackle climate change after a group of charities released a list of minimum standards it expects them to meet.
The initiative is being co-ordinated by Students Organising for Sustainability UK and the Friends Provident Foundation in partnership with the Charities Responsible Investment Network and the Responsible Investment Network – Universities.
In a statement, the signatories said the list of eight minimum standards would be taken as “considerations into our asset manager selection, monitoring and reviews”.
Signatories include charities, trusts and universities, including the conservation charity WWF-UK, the Joseph Rowntree Charitable Trust and the Barrow Cadbury Trust.
“We, the undersigned asset owners, support the objective of the Paris Agreement to keep global warming well below 2°C and preferably 1.5°C, the level considered ‘safe’ by the Intergovernmental Panel on Climate Change, and call on the asset management industry to adopt minimum standards in support of that objective,” the statement said.
Signatories said they hoped the standards would become market norms across civil society.
They said: “Increasingly asset managers are claiming to support the Paris Agreement and its objective but there is a huge variance in policy and practice.
“As asset owners we wish to send a strong market signal that below are the minimum standards we expect from asset managers on climate change.
“We hope other asset owners, journalists, civil society, and politicians will use these standards to help them judge what is good practice and what is greenwash as we welcome ever-more asset manager climate change commitments during COP26.”
Strategy, asset allocation, active ownership and transparency are the four key areas the minimum standards fall into.
Expectations include an investment strategy covering all assets under management to achieve net zero emissions by at least 2050, with at least 45 per cent emissions reduction by 2030 at the latest.
The exclusion of coal and tar sands in asset allocation is expected, while sectors involved in intensive agriculture and deforestation should also be considered for exclusion.
In addition to an active commitment to invest in solutions to climate change, investments should be focused on driving solutions forward to achieve a just transition to a decarbonised economy.