Top asset owners’ $23 trillion the real key to unlocking net zero

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[{"type":"text","content":"Over $23 trillion is concentrated with the top 100 asset owners, making it some of the most influential capital on the planet.Leading asset owners have the power to drive change in the investments industry and hold the keys and pathways to net zero.By thinking about the investment ecosystem* as a whole and collaborating across it, this group can have even greater impact than their large asset size implies. ARLINGTON, Va., Nov. 23, 2021 (GLOBE NEWSWIRE) -- The world’s 100 largest asset owners (AO100) grew by 15.7% last year to reach $23.5 trillion as of year-end 2020, according to new research from Willis Towers Watson’s Thinking Ahead Institute. Pension funds remain the single biggest group of asset owners globally accounting for 58.1% of assets, followed by sovereign wealth funds (34.7%) and outsourced chief investment officers (OCIOs) and master trusts combined (7.2%). According to Roger Urwin, co-founder of the Thinking Ahead Institute, “This relatively small group of investors are right on the front line of the investment community’s fight to become net zero, and their power is even more concentrated among the top 20, which are responsible for nearly $13 trillion.” As the research shows, there are three accredited net zero committed organizations in the top 20 and only 14 in the top 100. “While the pledges from Glasgow Financial Alliance for Net Zero (GFANZ) organizations are critical, the largest asset owners hold the ‘keys to the castle,’ said Urwin. “Their allocations, ownership muscle and trickle-down influence will be important in opening the door to net zero pathways. “But to successfully manage the complexity and challenges of sustainable investment and net zero pathways, asset owners will need to develop enhanced governance and investment sophistication. “The Glasgow COP26 summit has highlighted how asset owners can work together as part of a wider collaboration framework to produce better long-term outcomes for the whole system.” According to the research, the development of systems leadership** practices — those that acknowledge the size and interconnectedness of the climate challenge — will support much-needed innovation and collective action; however, asset owners will need to face up to and overcome numerous impediments, including narrow interpretations of fiduciary standards, that have pushed them to maintain e...

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