Our commitment to net zero emissions

We joined the Net Zero Asset Managers initiative to target net zero greenhouse gas emissions by 2050 or sooner. Learn how we aim to achieve the goal.
January 2021
Vicki Bakhshi

Vicki Bakhshi

Director, Analyst, Responsible Investment Team

To secure a sustainable future, we must urgently address climate change. The relentless rise in greenhouse gas emissions must be reversed, and rapid progress made towards net zero greenhouse gas emissions globally, in order to limit global warming to below 1.5°C. But this will not happen if left to governments alone – robust action from investors and corporates is essential.

BMO Global Asset Management has been active on climate change for many years. Our corporate engagement on the topic started in 2000, and is now fully integrated with our voting approach. We have engaged over many years with governments to encourage robust policy approaches. And we are carbon neutral in our own operations, as part of a commitment made by BMO Financial Group in 2010.

But with the urgency of the issue ever more apparent, it is time to step up and go further, and adopt an ambitious approach in relation to the climate impact of our invested assets.

In December, BMO Global Asset Management1 joined a group of asset managers representing over $9trn AUM to launch the Net Zero Asset Managers initiative. Through this initiative, we are all committing to support the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5°C. As part of the initiative, we have committed to:

  • Work in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management
  • Set an interim target for the proportion of assets to be managed in line with the attainment of net zero emissions by 2050 or sooner
  • Review the interim target at least every five years, with a view to ratcheting up the proportion of AUM covered until 100% of assets are included

Read the full commitment here.

Partnering for success

The key to achieving this ambitious goal will be partnership. We will continue to work in partnership with our investee companies, encouraging them to adopt net-zero goals consistent with our own. We also want to step up our partnership with clients, providing information on the practical implications of adopting net-zero targets, and ensuring that a wide range of investment solutions are available across asset classes which can help them achieve this.

In demonstrating delivery against the commitment, we will submit disclosures in line with the Task Force on Climate-related Disclosures recommendations through The Investor Agenda investor networks for review. This process will ensure our approach is based on a robust methodology, consistent with the United Nations Race to Zero criteria, and that action is being taken in line with the commitment statement.

Risk warnings

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.
Use our handy glossary to look up any technical jargon you are unfamiliar with.
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“Asset managers have a unique and critical role to play in the transition to global net zero emissions. We look forward to building partnerships both with our asset owner clients, and with the companies we invest in, to move together on the journey to making this a long-term shared goal.”

Kristi Mitchem, CEO, BMO Global Asset Management

What about financial returns?

Maximising our clients’ long-term risk-adjusted financial returns remains our objective. We have long believed that the consideration of ESG issues is supportive of this objective, by helping us to better identify risks and opportunities. In the case of climate change, the systemic financial risks associated with unabated climate change are becoming ever more apparent, and the adoption of net zero goals by governments and corporates is rapidly gaining momentum. In this context, we believe that supporting net zero-aligned investing makes sound long-term financial sense for our clients, but as a client-focused asset manager will ensure that any changes we make are fully consistent with the mandates we have with them, as well as with local regulations.

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“Across the financial sector, there is growing recognition that whilst of course delivering financial returns is our objective, we also need to analyse how our actions – or inactions – have an impact on meeting the world’s needs.”

Alice Evans, Managing Director, Co-Head, Responsible Investment

Get to know the author

Vicki Bakhshi has worked at BMO GAM since 2006, focusing on climate change engagement and strategy. Prior to BMO, she worked in the UK Prime Minister’s office advising on climate change. Outside of work she enjoys trail running, and spending time with her two boys.

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