The new NZAM Commitment Statement is pragmatic and ambitious: now asset owners must show their support

Rory Sullivan

The Net Zero Asset Managers initiative (NZAM) was launched in 2020 as a voluntary initiative for asset managers to publicly disclose their net zero commitments and implementation approaches. By providing a platform for reporting and through supporting signatories with guidance and support in developing net zero commitments, NZAM contributed to the rapid adoption of net-zero target-setting by asset managers. By early 2025, NZAM had more than 325 asset manager signatories and over $57 trillion in AUM.

However, from the beginning of 2023, net-zero coalitions such as NZAM started to face significant headwinds including the ‘ESG backlash’ in the United States, concerns around energy security in the wake of Russia’s invasion of Ukraine, and growing questions around whether net zero commitments were aligned with investors’ fiduciary and other duties.

In early 2025, NZAM was suspended while it carried out a comprehensive review and engagement process with signatories and other stakeholders to ensure the initiative remained relevant and fit for purpose. This review resulted in a new NZAM Commitment Statement which was relaunched in early 2026.

Streamlined framework wins support

The relaunched NZAM Commitment Statement is a pragmatic yet ambitious update that remains anchored in the objectives of the Paris Agreement and the global goal of net zero emissions. The new Commitment Statement (see box) streamlines the commitment actions from ten to seven to more clearly set out the material levers available to asset managers, while also placing a stronger emphasis on alignment with fiduciary duties, client mandates and regulatory requirements. Another notable change is that the new commitment no longer includes references to investing in line with the goal of reaching net zero by 2050 (reflecting the desire to accommodate signatories from a wider range of markets, including those with net zero targets set for later than 2050), but instead includes a commitment by signatories to set near-term climate targets consistent with the global goal of net zero greenhouse gas emissions.

While NZAM has lost signatories, impressively more than 250 asset managers have signed up to the new commitment statement. They include organisations such as Legal & General, BNP Paribas, UBS Asset Management, Aviva Investors and Nordea Asset Management. Encouragingly, a number of US headquartered asset managers, rather than not signing at all, have chosen to have parts of their business sign up while explicitly excluding their US or North American businesses.

An Overview of the NZAM Commitment Statement

NZAM provides asset managers with a platform to publicly disclose their individual net zero commitments and implementation approaches. Consistent with their fiduciary duties and, where applicable, client mandates, fund investment objectives and other legal obligations, the signatories commit to: 

1.         Providing their clients with information to help them understand and act on climate-related financial risks and opportunities. 

2.         Supporting their clients to deliver on their climate goals, e.g. through increased investment in climate solutions, transition finance and climate-resilient investments. 

3.         Setting near-term climate targets consistent with the global goal of net zero greenhouse gas emissions, and reviewing these periodically to reflect evolving financial risks, client expectations, and practices. 

4.         Implementing investment stewardship strategies to support investees to address material climate risks and opportunities. 

5.         Engaging with key actors in the investment system to encourage the availability of products and services that appropriately reflect climate-related risks and opportunities. 

6.         Ensuring that their policy advocacy does not undermine these commitments. 

Publicly disclosing a plan for implementing these commitments and reporting annually on the actions taken towards these, and any outcomes achieved. 

So How Do We Maintain Progress? The Critical Role of Asset Owners

One of the key reasons for asset managers to become a signatory to NZAM is the ability to showcase how they are addressing climate-related financial risks and capturing the opportunities presented by the transition to a low-carbon economy for their clients and beneficiaries. These disclosures also enable asset owners with net zero commitments to identify managers who are aligned with their expectations and needs.

But, in our view, asset owners need to actively demonstrate their support for NZAM and for the asset managers that become signatories to NZAM. In the short- to medium-term, asset owners have three specific roles that they can play.

• First, asset owners should encourage asset managers to join NZAM. The public statement supporting NZAM which was signed by some 50 asset owners is a clear signal that asset owners support the initiative.  However, such statements need to be refreshed and reinforced so that there is constant repetition of the message that fiduciary investors (asset owners) expect their asset managers to effectively address and manage climate-related risks and transition opportunities.

• Second, asset owners should press NZAM and its signatories to ensure that the disclosures and information provided by asset managers are useful. Of particular importance is ensuring that asset managers clearly define the scope of their commitments (i.e. which assets are covered and which are not covered), and are clear about their targets and commitments. This includes ensuring that the reporting provided clearly explains how the asset manager is performing against these targets and commitments and the actions being taken. It is also important that asset managers clearly communicate the limits of what they are doing (e.g., which assets are not covered by their commitments and targets, what actions they are not undertaking).

• Third, asset owners need to be transparent about their actions and their decisions. They need to explain whether and how being an NZAM signatory is incorporated into their manager appointment and reappointment processes. They need to explain what their expectations of the funds they invest in are (i.e. do these funds need to be covered by an organisation’s net zero commitments). And they need to explain how the information provided by investment managers is used in manager monitoring, appointment and reappointment processes.

In conclusion, the new NZAM Commitment Statement, and the fact that it is supported by over 250 asset managers, is a clear demonstration that asset managers have a real appetite to contribute to achieving societal goals around net zero. The challenge now is to maintain momentum and interest. Asset owners have a key role to play; they need to stress their support for NZAM,  they need to be clear that addressing climate-related risks and transition opportunities is a fiduciary imperative and they need to be clear that they see that being a signatory to NZAM is a clear signal of an asset manager’s commitment to managing climate-related financial risks and opportunities on behalf of its clients.

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For more on our work on climate and net zero visit here or contact rory@chronossustainability.com