IFM Investors, an Australian fund manager with A$159 billion ($114.6 billion) in assets under management, has pledged to reduce greenhouse gas emissions across its portfolio in a move to become carbon net zero by 2050, which is in alignment with the Paris Agreement.
The fund manager said it has launched a multi-disciplinary task force to support the commitment, which will be led by its investment team. IFM said the task force will establish frameworks and policies to guide and support sustainable decisionmaking processes intended to mitigate climate change risk exposure and reach the net zero target in 30 years.
“This is a natural step and an important one if IFM is to continue delivering on its purpose to protect and grow the long-term retirement savings of working people,” IFM Investors CEO David Neal said in a statement. “The investment horizon of IFM and our investors is often measured in decades, not years, and it’s vital that we actively manage the risks posed by climate change.”
IFM said the task force will consider:
Establishing emission reduction commitments;
Identifying investment opportunities in decarbonization and climate-resilient assets;
Developing policies for net zero transition plans for new and existing unlisted assets;
Enhancing investment decisionmaking and governance frameworks when considering climate change risks and alignment with emission reduction objectives; and
Understanding new green technologies and better understanding likely transition pathways, especially regarding energy.
“The actions we take will help ensure we continue to deliver long-term, risk-adjusted returns for our investors and their members and beneficiaries,” Neal said.
IFM said it has already begun implementing strategies to reduce carbon emissions in its infrastructure portfolio companies, such as setting targets for Australian assets to reduce emissions by 200,000 tons by 2030, and developing targets for global assets. It is also investing in renewable energy projects to help power assets, and, earlier this month, it formed Nala Renewables, a joint venture with commodity trading company Trafigura that will invest in solar, wind, and power storage projects worldwide with a target of 2 gigawatts (GW) of projects within five years.
IMF joins a growing list of funds and endowments worldwide that have made pledges this year to become net zero by 2050.
In March, the retirement board of the $27 billion San Francisco Employees’ Retirement System (SFERS) voted unanimously in favor of a climate action plan to make its portfolio net carbon zero by 2050. And, in April, Harvard University instructed its $41 billion endowment to develop a strategy to achieve net-zero greenhouse gas emissions from its investment portfolio by 2050.
In July, A$52 billion Australian superannuation fund HESTA became the first Australian superannuation fund to commit to reducing its investment portfolio’s carbon emissions by one-third within 10 years and becoming net zero by 2050. Also in July, UK pension fund National Employment Savings Trust (Nest) unveiled a new climate change policy designed to halve the carbon emissions in its portfolio by within 10 years, and make it completely net zero by 2050.