GMO Announces Initial Net Zero Asset Targets

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Grantham, Mayo, Van Otterloo LLC (GMO), a global investment manager, has released its initial net zero targets and transition plan.

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Thursday, November 17, 2022
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Environment, Climate Change, Finance, Environmental Policy, Environmental Issues, Banking, Professional Services, Sustainability, Green Technology, GMO, Investment, Paris Agreement, Paris, Consultant, ESG, Carbon, Survival, Silent Scope 3, Sustainability, Civilization, Entrepreneurship, Philosophy, Climate change, Climate, Agriculture, Renewable energy, Financial services
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MASSACHUSETTS, AUSTRALIA/OCEANIA, UNITED STATES, UNITED KINGDOM, NORTH AMERICA, AUSTRALIA, EUROPE
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GRANTHAM, MAYO, VAN OTTERLOO, GRANTHAM, MAYO, VAN OTTERLOO LLC, GMO
Summary
Key Points: 
  • Grantham, Mayo, Van Otterloo LLC (GMO), a global investment manager, has released its initial net zero targets and transition plan.
  • In October 2021, GMO became a signatory of the Net Zero Asset Managers initiative (NZAM) and committed to reducing GMO investment portfolios net emissions to zero by 2050 or sooner, in line with efforts to limit global warming to 1.5 degrees Celsius.
  • GMO believes that climate change poses critical risks for the companies and countries in which it invests and that the net zero pledge will help to improve long-term investment outcomes for GMO clients.
  • GMO efforts to meet these goals will include growing the proportion of GMO investments in companies that have put in place science-based targets in line with net zero, engaging with issuers on net zero targets, refining its measurement capabilities to go beyond Scope 1 and 2 emissions to include Scope 3, developing new climate and net zero-aligned strategies, and partnering with the Grantham Foundation on climate solutions.


Grantham, Mayo, Van Otterloo LLC (GMO), a global investment manager, has released its initial net zero targets and transition plan. In October 2021, GMO became a signatory of the Net Zero Asset Managers initiative (NZAM) and committed to reducing GMO investment portfolios’ net emissions to zero by 2050 or sooner, in line with efforts to limit global warming to 1.5 degrees Celsius. GMO believes that climate change poses critical risks for the companies and countries in which it invests and that the net zero pledge will help to improve long-term investment outcomes for GMO clients.

As part of the NZAM commitment, GMO has submitted its initial net zero targets and transition plan, including:

  • Reducing the carbon intensity of included investment portfolios by 65% by 2030, compared to levels in GMO’s baseline year of 2019, and
  • Increasing the percentage of GMO assets covered under this target from 53.5% to 60% by 2025.

GMO efforts to meet these goals will include growing the proportion of GMO investments in companies that have put in place science-based targets in line with net zero, engaging with issuers on net zero targets, refining its measurement capabilities to go beyond Scope 1 and 2 emissions to include Scope 3, developing new climate and net zero-aligned strategies, and partnering with the Grantham Foundation on climate solutions.

“There are stark differences between how the world will be impacted by warming of 1.5 degrees Celsius and warming of 2 degrees Celsius, or more, which we believe would pose challenges to our ability to earn returns for our clients. Therefore, we think supporting the goal of net zero emissions by 2050 or sooner to limit warming to 1.5 degrees Celsius is critical to our future investment success. Setting initial net zero targets is an important step in our efforts to aid the fight against climate change and demonstrates our commitment to leading on this issue within the investment industry,” said Deborah Ng, Head of ESG and Sustainability.

“Climate change is the greatest challenge humanity has ever faced. It is the race of our lives. Investing in sustainability means investing in our grandchildren, in our civilization, in our survival as a species. Initiatives aligning with net zero are critical ways our industry can show the leadership that will be a necessary part of combating these challenges. All of us need to make sustainability integral to what we do. It is the fight for our very existence on this planet,” said Jeremy Grantham, Co-Founder and Long-Term Investment Strategist, and a leading global advocate for climate change efforts and investment.

The Net Zero Asset Managers initiative was launched in December 2020 and is designed to enable asset managers to play their part in helping to deliver on the goals of the Paris Agreement. Its signatories now include 291 asset managers with $66 trillion in assets under management, more than half of the entire asset management industry globally in terms of total funds managed.

About GMO

GMO is a global investment manager that brings together focused expertise within our investment teams, industry-leading research, and tailored client service to advance our clients’ goals. Privately owned and renowned for our conviction in a valuation-based, long-term investment philosophy, GMO has been a partner to institutions, family offices, wealth managers, and consultants for over 40 years. For more information, please visit www.gmo.com.

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