As a member of the Net-Zero Asset Owner Alliance, Old Mutual Limited will contribute to attaining global net-zero greenhouse gas emissions in its investment portfolios.
Old Mutual Limited (OML) has announced its membership in the United Nations-convened Net-Zero Asset Owner Alliance (AOA), which brings together a collection of like-minded asset owners with the purpose of driving worldwide delivery of the net-zero target by 2050. Through its Investment Group, Old Mutual is now a member of both the AOA as an asset owner and the Net Zero Asset Managers Initiative (OMIG).
The AOA is an international organization of 70 institutional investors with a combined total asset value of US$10.4 trillion. As one of the first African asset owners to join the AOA, Old Mutual is demonstrating its strong commitment to transitioning its proprietary investment portfolios to net-zero greenhouse gas emissions by 2050, as well as its full support for global efforts to limit global warming to 1.5°C above pre-industrial levels, as set by the Paris Agreement.
“We share the conviction of the Alliance that containing the global climate crisis requires commitment and collective effort from every sector, both public and private. We are committed to positively contributing to the global transition by decarbonising our proprietary investment holdings in a responsible and fair manner, aligned to improving real world outcomes. We understand the fundamental role that we must play as an asset owner through influence, capital allocation and collaboration, and we pledge to further our efforts in all of these areas in pursuit of real-world emissions reduction aligning with the 1.5°C Paris Agreement goal.” says Old Mutual Limited CEO Iain Williamson.
This commitment is driven by serious sustainability concerns, particularly within Africa. “Apart from preserving the planet for future generations, we have a fiduciary duty to ensure the sustainable continuity of our business and protect our stakeholders’ interests,” Williamson explains. “If we ‘don’t look up’ right now, and prioritise climate change action, we risk endangering the future of our economy, our business and the wellbeing of our stakeholders.”
Williamson stresses that as a company that plays a critical role in the socio-economic development of the emerging African markets it operates in, Old Mutual is equally determined to ensure this transition is made in a responsible and just way.
“Given South Africa’s current high carbon intensity, amidst the challenges of high unemployment, poverty and inequality, Old Mutual’s commitment to phase out thermal coal within its proprietary investment holdings over time requires the balancing of environmental priorities with economic and social considerations (now widely acknowledged and referred to as a ‘Just Transition’)” he says.
A major challenge in this regard will be finding opportunities to minimise the potentially negative impacts of the transition throughout Africa, ensuring that it is socially just and inclusive. Old Mutual views its historic investment in green economy assets, especially in relation to renewable energy and low-carbon technologies, as a key investment lever in navigating a path towards achieving the global net-zero emissions objective. The group has committed to actively investing in further green economy assets aimed at progressing the transition, mitigating the adverse effects of climate change, as well as contributing towards employment opportunities.”
“Old Mutual has established itself as an early innovator of investments, products and services that support the acceleration to global net-zero greenhouse gas emissions. In June 2020, for example, we launched the Old Mutual SA ESG Fund that is 40% less carbon intensive than the Capped SWIX,” Williamson says.
Williamson adds that Old Mutual will be striving to make a positive contribution to the net-zero goal primarily through conscientious capital allocation, proactive stewardship, influence and collaboration. “We pledge to increase our efforts in all of these areas in pursuit of the Paris Agreement goal,” he adds.
“Responding with agility to a changing world and making a clear and measurable positive impact is now a key aspect of our overall strategy to sustain, grow and protect our stakeholders’ long-term wellbeing,” Williamson says.
Old Mutual plans to release its inaugural Climate Report, incorporating the Task Force on Climate-related Financial Disclosures in April 2022 and will be disclosing its interim investment portfolio decarbonisation targets within the next 12 months.
