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Fund giants back SWFs in carbon transition

CO2_reducingEight fund firms - including France’s Amundi and the UK’s HSBC Global Asset Management - have set up a group that has aligned itself with sovereign wealth funds (SWFs) working towards carbon transition in capital markets.

BlackRock and BNP Paribas Asset Management are also part of the group helping with the implementation of the One Planet Sovereign Wealth Fund Framework.

Six SWFs founded the initiative two years ago to increase efficiency in global capital allocations in order to contribute towards creating a more sustainable, low-carbon global economy.

The eight firms - which also include Goldman Sachs Asset Management - have pledged to advance the understanding of the implications of climate-related risks and opportunities within long-term investment portfolios. This includes by sharing investment practices and publishing research.

The other firms involved are Natixis Investment Managers, Northern Trust Asset Management and State Street Global Advisors

The One Planet SWF Framework sets out three principles to accelerate the integration of climate change analysis into long-term investment management, including by encouraging companies to address material climate change issues in their governance, strategy, planning, risk management, and reporting. A significant degree of corporate failure has been found in this area.

The asset managers will also try to appeal to the wider industry, including standard setters and regulators, and they will meet in September this year at the UN Climate Summit in New York.

The sovereign wealth funds behind the One Planet SWF Framework are: Abu Dhabi Investment Authority, Kuwait Investment Authority, the New Zealand Superannuation Fund, Norges Bank Investment Management of Norway, the Public Investment Fund of the Kingdom of Saudi Arabia, and the Qatar Investment Authority.

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