On the go: Seventy-three per cent of asset managers surveyed by consultancy Mercer have yet to set climate transition targets – such as goals on achieving net zero – across their strategies.
Earlier in November, it was revealed by the Make My Money Matter campaign that none of the UK’s largest 20 defined contribution providers had set explicit policies on ending fossil fuel expansion. Mercer did not reply to the MMMM campaign’s survey.
Mercer, which surveyed more than 400 asset managers from around the world, said that the “adoption of science-based targets must be a priority for the investment community”.
Thirty-eight per cent of the managers surveyed have not set climate transition goals and do not intend to do so within the next one to two years, while 36 per cent stated their intention to implement these targets within two years. Just 16 per cent of managers surveyed have set science-based goals.
Eighty-nine per cent of managers, meanwhile, see transparency on companies’ environmental, social and governance factors as a barrier, while 60 per cent do not see climate data from companies in emerging and frontier markets as reliable, compared with businesses in developed markets.
Pension schemes with more than £5bn in assets have had to comply with Task Force on Climate-related Financial Disclosures rules since October 2021. This scope widened to schemes with more than £1bn in assets in October 2022.
According to Mercer’s findings, asset managers have a need for more regulation on companies’ financial reporting.
Eighty-two per cent of managers require more regulation around transparency and disclosure on businesses’ financial reporting, while 69 per cent cited a need for more regulation on companies’ ESG factors as a priority for lifting allocations.
