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By Reed MontagueESG Research Analyst, Calvert Research and Management

Washington - As of March 29, a new wave of 43 asset managers has joined the Net Zero Asset Managers initiative in support of achieving net zero greenhouse gas (GHG) emissions by 2050, or sooner. In line with the Paris Agreement and global efforts to limit warming to 1.5 degrees Celsius, this initiative brings the power of the investment management community squarely behind these efforts.

The Net Zero Asset Managers initiative now has a total of 73 members representing $32 trillion — or more than one-third (36%) — of total global assets under management (AUM). Since asset managers are responsible for investing trillions of dollars of capital, we believe their leadership in the transition to a global low-carbon economy is imperative. Collaboration with governments and the private sector is further essential to achieve the objectives of the Paris Agreement.

Calvert Research and Management was among the 30 founding signatories to the Net Zero Asset Managers initiative, launched last December, ahead of the fifth anniversary of the Paris Agreement. At that time, member assets totaled $9 trillion AUM. The initiative was founded by six partners, some of which Calvert already belonged to, including CDP, Ceres and the Principles for Responsible Investment.

Signatories commit to support the goal of net zero GHG emissions by 2050 and to support investing aligned with this goal. As a signatory — and as part of our longstanding Responsible Investing objectives and strategies — Calvert prioritizes the achievement of real economy emissions reductions within the sectors and companies in which we invest.

The initiative's collective assets have tripled in less than six months, underscoring its growing global recognition and significance. The Net Zero Asset Managers initiative is now also accredited by the United Nations' "Race to Zero" climate change campaign, joining 120 countries in the largest-ever alliance committed to achieving net zero carbon emissions by 2050, at the latest.

A recently formed Advisory Group, consisting of six founding partners, has oversight of the initiative's future operations, including implementation of GHG emission commitments, and the use of robust methodologies for target setting. Asset manager signatories have agreed to set interim targets for 2030, report annually on their progress and submit climate action plans.

Bottom line: Calvert believes that the Net Zero Asset Managers initiative, in concert with governments and private entities, can play a critical role in accelerating the transition toward global net zero emissions, so urgently needed today.