Ninety One has today been announced as one of the latest signatories of the Net Zero Asset Managers initiative and in doing so has restated its commitment to ensuring a fair transition, which the company has been calling for as part of its broader sustainability programme.
As the first South Africa-headquartered asset manager to sign the Net Zero Asset Managers initiative, Ninety One is uniquely positioned to recognise and advocate for capital to be adequately allocated to emerging economies to close the funding gap across these countries. Failure to close the funding gap within these economies could see them left behind as we transition to net-zero, thereby undermining global transition efforts altogether.
Commenting on Ninety One’s alignment with the Net Zero Asset Managers initiative, Therese Niklasson, Global Head of ESG at Ninety One, said:
“Ninety One is excited to join the Net Zero Asset Managers initiative and share our thinking and focus around real-world decarbonisation. Our South African roots influence Ninety One’s approach to sustainability and as such we feel uniquely positioned to recognise and advocate for a more inclusive and fair transition for the entire planet. The current trajectory of the global transition risks leaving behind the emerging economies. Whilst they are not responsible for the bulk of emissions to date, they face some of the most devastating consequences.
“Emerging market economies need time, support and financial resources to transition, yet the funding shortfall is huge, with just 20% of clean energy-investment going to these regions. Divesting from high emitting nations and sectors further expedites the problem, diverting away the capital critically needed by these economies to fund their transition. Furthermore, by placing too much emphasis on measuring a reduction in the carbon intensity of an investment portfolio – often resulting in the exclusion of the ‘worst’ culprits from portfolios – investment managers run the risk of shifting, rather than helping to solve, the problem. To succeed, the industry needs greater transparency around changes in portfolio footprints versus achieving decarbonisation in the real world.
“By signing the Net Zero Asset Managers initiative, we are committed to working with our clients and for the global climate goals that achieve real-world emission cuts, reward improvement and progression and prevent capital being driven away from the regions that need it the most.”
Hendrik du Toit, CEO of Ninety One, added: “Ninety One believes in sustainability with substance. The world needs an inclusive transition plan that works for all its 7.9 billion people. Therefore, a drive to net zero that excludes, intentionally or otherwise, any place or enterprise could result in no net zero at all. So, to us, the mission to reduce carbon must include the entire world. In particular, the carbon-intensive emerging market economies need time, encouragement and resources to adjust. Ninety One, as a company with its roots firmly in South Africa, understands this need perhaps better than most. Emerging economies, after all, are not responsible for the bulk of emissions to date.”