How the policy approaches to “Net Zero” investing differs among investors

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Here’s a report from Morningstar entitled “Asset Managers and Net Zero Investing: The Road Ahead.” As Jackie Cook covers in this note, the report delves into:

– The connection between the scientific basis for the decarbonization imperative and the investment challenge
– The timeline of climate action taken by the financial sector and investment industry over the past two decades
– The role of asset managers in pursuing economic decarbonization and how government action can help support private sector net zero action

The different policy approaches used by investors include:

– Provide certainty and clear market signals, especially regarding offsets markets and carbon pricing;
– Mandate standardized, integrated, decision-useful climate risk disclosure and assurance standards;
– Tackle emissions across the economy through fossil fuel phase-out, emission control regulation and ending fossil fuel subsidies;
– Take steps to incentivize private-sector climate positive investments;
– Promote natural climate solutions, linking net zero investing to protection of natural capital;
– Support sector transitions through green infrastructure development; and
– Require businesses and investors to produce climate transition plans.