UK Wealth Managers on Climate: A unified call for net zero action

In a move toward climate accountability, Tribe Impact Capital, alongside other members of the UK Wealth Managers on Climate Group, has issued a collective call for enhanced climate commitments from asset managers. Representing a combined £165 billion in assets, our group is urging asset managers to accelerate their progress toward net zero and support the financial sector’s role in addressing the climate crisis. This open letter outlines three clear actions asset managers must take to support our shared climate ambitions, highlighting the growing need for transparent, effective, and accountable climate practices in finance.

1. Improve ambition

Set a net zero commitment and ensure that your targets are clear and transparent.

Asset managers need to establish robust, transparent net zero commitments for all assets under management. This means moving beyond selective targets to cover their full portfolios, with clear and measurable interim goals to demonstrate ongoing progress.

Key expectations:

• Comprehensive coverage: Asset managers should adopt net zero targets that cover their entire portfolio, not just specific funds, ensuring that climate commitments reflect the full scale of their operations.
• Clear interim goals: To facilitate accountability, managers are encouraged to set transparent, measurable interim targets. These should include baseline emissions data, the percentage of assets under net zero targets, and a rationale for any exclusions.
• Best practice disclosures: Managers are also encouraged to explain why certain assets are excluded from targets, such as data limitations or methodological challenges, and provide a timeline for eventual inclusion.

This commitment to transparency and accountability will help us track climate progress more effectively.

2. Build action

Ensure that your approach is understood by your wider business and communicated to your clients.

Setting net zero targets is only part of the solution; managers must also integrate these goals into their daily investment practices. This call for action emphasises that real change comes from embedding climate targets in investment processes and measuring emissions reductions annually.

Key actions:

• Fund manager engagement: Asset managers should ensure that their net zero goals are fully understood and supported by all fund managers. This involves discussing how climate targets may influence investment decisions and portfolio composition.
• Annual emissions reporting: To track climate impact, we expect asset managers to report emissions reductions annually, using both absolute and intensity-based metrics. This dual reporting approach offers a fuller picture of climate impact across portfolios.
• Climate metrics integration: Managers are encouraged to develop internal dashboards that track emissions and climate metrics, attributing reductions to specific investment strategies. By integrating these metrics into their core decision-making, asset managers can make climate-informed choices that support sustainable outcomes.

These steps represent a commitment to action-driven change, empowering us to deliver greater climate impact to clients and stakeholders.

3. Increase influence

Strengthen links between your net zero commitments and your stewardship activities to focus on outcomes.

Finally, our letter underscores the need for robust stewardship to promote climate action within investee companies. This means engaging directly with companies to drive emissions reductions, encourage comprehensive climate disclosures, and align stewardship activities with net zero targets.

Key stewardship expectations:

• Collaborative climate action: We encourage asset managers to join industry groups and work collectively to enhance climate reporting and transparency, especially for emerging metrics such as Scope 4 emissions.
• Alignment of voting policies with net zero: Asset managers should apply climate-aligned voting policies across their entire equity portfolios, supporting companies in making decisions that reflect a commitment to sustainability.
• Transparent engagement reporting: Our letter calls for managers to disclose engagement outcomes on climate issues, including voting rationales at the fund level, allowing clients and stakeholders to evaluate stewardship efforts.

Through these stewardship practices, asset managers can become powerful advocates for climate-positive outcomes, leveraging their influence to drive sustainable change across the companies they invest in.

Building a Sustainable Finance System

Together with the other members of the UK Wealth Managers on Climate Group, we believe that these steps represent a path to climate accountability in the financial sector. While we recognise the challenges asset managers face in achieving these goals, we’re confident that measurable progress is possible within the next year. As a group, we’re committed to ongoing dialogue, working with asset managers to address challenges and navigate the complexities together.