Green asset managers push on with energy transition

The Investor Leadership Network’s new initiative aims to speed up financing of the energy transition

An investor-led consortium has pledged a three-year deal to accelerate pension fund and institutional investments in sustainable infrastructure and the energy transition. 

The Investor Leadership Network (ILN) has the buy-in of the United States Treasury, The Rockefeller Foundation, and the Sustainable Markets Initiative to broaden and deepen private sector financing in emerging and developing economies. 

The initiative is focused on increasing access to data and developing mechanisms to spur investments in key sectors and countries, and is set to include co-investing with multilateral development banks. The ILN said it will set up a working group in time for COP28, the 28th United Nations Climate Change conference scheduled to be held in Dubai at the end of this year. 

The ILN, which turns five this year, was launched by the Group of 7 (G7) countries to power the transition to a sustainable global economy. Made up of asset owners and managers with over $10trn assets under management, it has three key areas of focus: private capital mobilisation for sustainable development; diversity, equity and inclusion; and climate change. 

Members include Canadian pension fund CDPQ, Natixis Investment Managers and global investment manager, Ninety One. Hendrik du Toit (pictured), founder and chief executive of Ninety One, said: “To achieve real-world decarbonisation, investors must finance new infrastructure and industries that will help the transition. 

“This includes investing at scale in green technology, but also providing capital for credible transition pathways for work on today’s high emitters – especially in emerging markets. Financing the transition in emerging markets is a critical part of the path to net zero.”

The initiative’s endorsement from the United States Treasury comes as welcome news to US asset managers facing a growing backlash against sustainable investing. Most recently, Congress has listened to evidence from both sides of the debate, which is split down political fault lines, after state attorney generals lobbied the law-making body to limit ESG investing. Asset managers are battling targeted action from state attorney generals that include being sued for breach of fiduciary duty for divesting in oil and gas assets, civil investigative demands and being placed on restricted lists.