Global ESG Research Update — Wellington joins Net Zero Asset Managers initiative

We explain our decision to join the Net Zero Asset Managers initiative as a founding member. We also provide an update on our ESG engagement and proxy voting activity in the quarter.

The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional or institutional investors only.

This past December, we announced that Wellington Management has joined the Net Zero Asset Managers initiative as a founding member. Through this initiative, we commit to work in partnership with clients on their decarbonization goals and set an interim target for the proportion of assets to be managed in line with the attainment of net-zero emissions by 2050. This commitment is grounded in our belief — forged by extensive research — that climate change poses material risks for companies, economies, and society, and therefore, our clients’ investment portfolios.

In collaboration with Woodwell Climate Research Center, a leading climate-science think tank, we have been researching the physical effects of climate change on capital markets and are integrating those findings into our investment practices. This work has strengthened our conviction that climate science can inform our stewardship approach and enhance the investment decisions we make on behalf of our clients.

As the transition to a lower-carbon economy continues, we expect markets to begin repricing assets accordingly. This commitment therefore aligns with our stated objective and fiduciary duty to our clients: maximize long-term risk-adjusted returns. In fact, we believe this lens may help us identify companies poised to outperform in a lower-carbon economy and avoid those that present less credible transition strategies.

We strongly believe that engagement is a critical mechanism for helping companies appreciate the potential wide-ranging effects of the low-carbon transition on security valuations. Robust transition plans that result in…

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