A group of firms from the UK wealth management industry has written to asset management companies, calling on them to ‘embrace’ net zero.

The UK Wealth Managers on Climate group, formed in September 2023, is made up of nine wealth management firms that represent £165bn of assets under management (AUM).

Recognising the wealth sector’s potential to leverage positive action, the companies co-signed a letter outlining three climate change ambitions they wanted asset managers to meet.

Asset managers were encouraged to set a net-zero commitment that’s covers all AUM and ensure that targets are clear and transparent, including baseline year emissions for the chosen targets and percentage of assets currently covered by net-zero targets.

The letter also urged asset management companies to communicate the approach clearly to both the business and clients, ensuring that their net-zero approach is understood by their fund managers and reporting on emissions reductions over time within funds at least annually.

Finally, the group called on asset managers to ensure that stewardship activities reflected net-zero commitments and to deliver ‘tangible’ goals.

This included establishing a stewardship framework based on climate analysis, with ‘clear steps’ of escalation, and increased reporting on climate-related votes at a fund level.

“As managers of assets ourselves, we are aware of the complex implications of setting long-term net-zero commitments and interim targets on investments,” the letter stated.

“Methodologies, timeframes and ambition all vary greatly across our industry – and different expectations from wealth managers like ourselves have historically complicated the landscape further.

“We would ideally like to see progress against these steps within the next 12 months, but understand that there may be challenges in doing so for some of our managers.

“We strongly welcome feedback and further discussion with you as we navigate this complex space together."

The UK Wealth Managers on Climate group is made up of: Cazenove Capital, EQ investors, Paradigm Norton, Quilter Cheviot, Sarasin & Partners, Greenbank, 7IM, LGT Wealth Management, and Tribe Impact Capital.

This article originally appeared on our sister title, Wealth Investment News.

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