The third annual survey of New Zealand's institutional investors found only 30 percent had a strategy or plan to achieve their net zero objectives. Photo: 123RF
New Zealand's biggest investors are being told to accelerate climate action after a survey revealed slow movement in the drive to net zero emissions.
The third annual survey of New Zealand's institutional investors found 30 percent had a strategy or plan to achieve their net zero objectives, while 26 percent had a formal plan for investments in climate solutions.
It found 54 percent had a decarbonisation strategy and 100 percent carried out negative screening, which was the process of identifying companies that performed poorly on environmental, social and governance metrics.
The report was prepared by the Investor Group on Climate Change (IGCC), Centre for Sustainable Finance and Mindful Money.
They said the results showed the investment sector "is not yet using its capital and its influence to drive the transition to net zero".
Centre for Sustainable Finance chief executive Jo Kelly said while investors were focused on companies' reporting, they were yet to match it with specific commitments and actions to reduce emissions they financed.
"The proportion of investors that have targets for investing in companies that are aligned with climate action (such as companies contributing to the climate transition) or providing climate solutions (such as technology that enables others to reduce emissions) is small but growing," Kelly said.
Barry Coates. Photo: Supplied
"There are still almost two thirds of fund managers in New Zealand without a target, compared to one third in Australia."
But IGCC chief executive Rebecca Mikula-Wright said many fund managers had taken early steps to decarbonise investments, unusually through divesting from fossil fuel companies failing to transition to clean energy.
"It is good to see most fund managers are also increasing their engagement and stewardship across their portfolio, encouraging companies to set targets and reduce their emissions."
Mindful Money chief executive Barry Coates said more investment managers needed to set long-term goals and targets.
"That's a really important process and frankly, most people with a Kiwisaver want their investment providers to do this.
"It's not happening fast enough - the fund managers need to make the commitments, set the targets and start to take the actions that are really going to reduce their emissions."
