Asset Manager and Asset Owner Task Force
At The former Prince of Wales’ invitation, executives from a number of the world’s largest Asset Managers and Asset Owners have come together as members of the Sustainable Markets Initiative’s Asset Manager and Asset Owner Task Force to work on meaningful and actionable plans to help accelerate the world’s transition to a sustainable future.
The Task Force is aimed at finding scalable ways for institutional investors to facilitate the reallocation of capital toward sustainable solutions, using the two most powerful levers at their disposal: 1) capital already invested in companies; and 2) fresh capital investments directed at climate mitigation and adaptation projects.
The Task Force will provide regular updates and outputs throughout the year.
Transition Finance Consensus Mapping
Climate Bonds Initiative released a mapping of corporate transition frameworks which is part of a wider collaborative effort that also includes the Sustainable Markets Initiative Asset Manager and Asset Owner Task Force as well as Climate Arc, and Institutional Investor Group on Climate Change (IIGCC), with methodological feedback from Glasgow Financial Alliance for Net Zero (GFANZ) and representatives from the investment world.
The project addresses the pressing challenge of navigating through various corporate transition frameworks that have proliferated. The goal is to create a navigator tool that enables financial institutions to orientate their corporate portfolios in a way that is consistent with those frameworks. Read more about it on the Climate Bond Initiatives webpage: Transition Finance Consensus Mapping | Climate Bonds Initiative
Transition Categorisation Framework
In January 2023, the Sustainable Markets Initiative Asset Manager and Asset Owner Task Force released its Transition Categorisation Framework. The Framework is consistent with industry ambitions to achieve net zero and aims to categorise assets that fulfil the objectives for a transition to net zero, as separate from purely green investments. Depending on the entity being financed, this asset categorisation could apply at company or project level.
Recommendations for Accelerating Viable Transition Finance Structures
These are a set of recommendations to serve as an actionable guide for asset managers, asset owners, Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs), and policymakers to accelerate the flow of capital, at scale, toward viable and credible transition finance structures. Despite the wide range of viable transition finance structures, these recommendations call for a credible and inclusive transition definition, a supportive enabling and policy environment, and appropriate levels of blended finance and investment de-risking.
Investor Expectations for Banking Transition to Net-Zero Emissions
Recognizing the scale and urgency of the action needed, the Asset Managers and Asset Owners Task Force has developed a set of investor expectations asking banks to raise their climate ambitions by striving for a goal of global net-zero emissions by 2050. The Task Force is asking to make this commitment in order to manage climate-related risks and proactively position themselves for a low carbon economy. These asks are meant to serve as an example of best practice - they are not intended to be overly prescriptive, and accelerate actions that - if taken - will lead to faster decarbonization of a critical industry.
Asset Owner Practitioner's Guide: Net-Zero Allocation
The members of the Net-Zero Asset Allocation Working Group, working on behalf of the Sustainable Markets Initiative’s Asset Manager & Asset Owner Task Force, propose a framework of principles and best practices dedicated to all types of asset owners to include climate change and net-zero considerations in portfolio construction.
Investor Expectations for Shipping Transition to Net-Zero Emissions
Climate risk is investment risk. As investors continue to orient their asset stewardship programs to reflect this reality, hard-to-abate sectors each present their own stewardship and engagement challenges. This document work lays out considerations investors can take into account when engaging with companies in their portfolios engaged across the shipping industry to support to transition of this sector to net-zero. The Task Force looks forward to continuing this work across hard-to-abate industries.
Ron O’Hanley, State Street Chairman and CEO
We share The former Prince of Wales’ sense of urgency to find scalable solutions to the challenges of climate change. Working with the Sustainable Markets Initiative’s other Task Forces, we believe we can create pathways that will unlock the deployment of trillions of dollars in institutional capital that will be needed in the next decade to set the world on a more sustainable and resilient path that protects both people and planet.