Wellington joins Net Zero Asset Managers Initiative

Statement from Jean Hynes, Portfolio Manager and incoming CEO; and Wendy Cromwell, Vice Chair and Director of Sustainable Investment

We are pleased to announce that Wellington Management is joining 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 are pleased to partner with clients who have made this commitment and are interested in developing action plans. We also 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 global emissions reductions will help to avoid the worst effects of physical climate change in client portfolios. As a large active manager, we will work with companies to encourage net-zero commitments and monitor their implementation.

We will also continue to partner with clients and the broader investment community to share insights on the physical and transition risks of climate change, climate stewardship, and net-zero investing.

As Phil Duffy, president and executive director of Woodwell Climate Research Center put it,

“Wellington’s participation in the Net Zero Asset Managers Initiative is exciting. To limit the most harmful impacts of climate change, science indicates we must achieve carbon neutrality globally by 2050. That will require sweeping changes across all sectors, so moving trillions of dollars into net-zero emissions investments is a significant step in the right direction. We also commend Wellington’s commitment to achieving carbon-neutral operations by 2022. These are the kinds of actions needed to meet the urgency of the climate crisis.”

Keep up with our sustainable investing efforts on our online hub.

To learn more about the Net Zero Asset Managers Initiative, please see their website.

RECOMMENDED FOR YOU

Global ESG Research Update — <br> Update on stewardship priorities
We share an update on our 2021 stewardship priorities, including diversity, equity, and inclusion (DEI) and climate change. We also provide an update on our ESG engagement and proxy voting activity in the quarter.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
November 2021
Global ESG Research Update —
Update on stewardship priorities
,
publish
Climate Action’s Sustainable Investment Forum interview: Climate leader insight (Video replay)
In this event replay from the 2021 Sustainable Investment Forum North America, Head of Sustainable Investment Wendy Cromwell discusses the tools asset owners can consider to align portfolios with the energy transition, how investors are incorporating climate science into investment decisions, and how corporations can build credible climate commitments.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
November 2021
Climate Action’s Sustainable Investment Forum interview: Climate leader insight (Video replay)
,
publish
Our commitment to net zero
We share our client-centric, engagement-driven approach to net zero by 2050, including our investor toolkit and measurement processes.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
November 2021
Our commitment to net zero
,
publish
<em>The Economist’</em>s Sustainability Week interview: Countdown to COP26
In this event replay from The Economist’s 2021 Sustainability Week, Head of Sustainable Investment Wendy Cromwell discusses how investors are incorporating climate science data into investment decisions, the anticipated implications for capital markets of climate change adaption, and net-zero considerations for the energy transition.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
October 2021
The Economist’s Sustainability Week interview: Countdown to COP26
,
publish
After the inflection point: How the climate challenge will transform the global economy
The decarbonization commitments of countries around the world will fundamentally reshape the global economy. Members of our Central Macro Team highlight their research findings, from the effects on growth and the cost of capital to the potential for geopolitical conflict and higher inflation.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
October 2021
After the inflection point: How the climate challenge will transform the global economy
,
publish
Climate conundrum: Will carbon constraints affect the pursuit of other portfolio objectives?
Members of our Fundamental Factor Team share their research on the potential for trade-offs when carbon goals are integrated into outcome-oriented, factor-based portfolios.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
October 2021
Climate conundrum: Will carbon constraints affect the pursuit of other portfolio objectives?
,
publish
Countering climate risks through collaboration
Global Industry Analyst Alan Hsu and Dr. Philip Duffy of Woodwell Climate Research Center discuss the importance of close cooperation between investors and climate scientists when addressing climate action.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
October 2021
Countering climate risks through collaboration
,
publish
Adapting to climate change: Investing in the resiliency imperative
As the risks of climate change increase, so does the need to build resiliency. Members of our Climate Research Team discuss why they believe demand for climate adaptation solutions could grow exponentially, and how they think about investing in solutions for a range of climate variables, including heat, flooding, wildfires, and water scarcity.
Archived insights remain available on the site. Please consider the publish date while reading these older insights.
publish
September 2021
Adapting to climate change: Investing in the resiliency imperative
,
publish
Chris Goolgasian
 CFA, CPA, CAIA
Erika Murphy
 CFA, CAIA