Addressing climate change and accelerating the low carbon transition

• Macquarie Asset Management (MAM) announces plan to manage its portfolio in line with net zero emissions by 2040.
• MAM is already measuring GHG emissions at its private portfolio companies and will identify pathways to reduce emissions and work with each company to produce Paris-aligned business plans by the end of 2022.

Macquarie Group is supporting the transition to a low carbon economy by progressing a range of solutions to mitigate climate change and adapt to its effects. At the fifth anniversary of the Paris Agreement, Macquarie Asset Management, a top 50 global asset manager and the world’s largest manager of infrastructure, has announced a commitment to manage its portfolio in line with net zero emissions by 2040.

In a letter to investors, Martin Stanley, head of Macquarie Asset Management, set out the vision and actions that will shape how MAM achieves its ambition to be the global leader in sustainable real asset management.

Martin Stanley said: “As long-term investors in companies that underpin economies and communities, we take our responsibility to address climate risks seriously. As stewards of these vital businesses, we have a duty to ensure they play their part in global efforts to address our warming planet. Today we are announcing a range of commitments that will reduce emissions across our portfolio and build sustainable long-term value for the benefit of our portfolio companies, our clients and the communities in which we operate.”

In alternative investment portfolios where MAM exercises control or significant influence over the underlying investments, our goal is to have Paris-aligned/net zero business plans in place by the end of 2022. This commitment has several steps, which are already underway:

• Measure greenhouse gas emissions of all portfolio companies
• Identify pathways to reduce emissions
• Develop business plans that contribute to a net zero economy by 2040, or sooner
• For new investments, target completion of these steps within 24 months of acquisition
• Work with our portfolio companies with the aim that they will be meeting their Paris-aligned/net zero emissions reduction pathways by 2030
• Report on our progress annually

In MAM’s managed portfolios of public securities, and alternative investments where MAM does not have significant influence, we will support the goals of the Paris Agreement in a manner consistent with our client-guided fiduciary and regulatory responsibilities.  

This detailed commitment by MAM complements extensive activity across Macquarie Group in developing and managing renewable energy projects, helping clients on their decarbonisation pathways, and adapting infrastructure for climate resilience.

As part of the Group’s wider capabilities, Macquarie’s Green Investment Group (GIG) is a leading global developer and investor in renewable energy projects with a mission to accelerate the global green transition. GIG is working across 25 markets to help companies and countries achieve their decarbonisation objectives. GIG has already invested or arranged over $A36 billion in green energy projects, provided clients with power purchase agreements for over 3GW of renewable energy capacity, and is developing a 30GW global pipeline of new projects.

Over the past ten years Macquarie Group has invested over $A60 billion in renewable energy projects, while also operating on a carbon neutral basis. Macquarie is currently developing, constructing, investing in and managing over 50GW of renewable energy projects across four continents and supporting governments and clients to realise their decarbonisation ambitions across broad sectors of the economy, including energy, agriculture, transportation, waste, industrial emissions and real estate. 

Macquarie supports a number of international initiatives including the Global Center on Adaptation, the Climate Finance Leadership Initiative, the Taskforce on Scaling Voluntary Carbon Offsets, and the Sustainable Markets Initiative. Macquarie Group has been reporting according to the Task Force on Climate-related Financial Disclosures since 2019. 

As part of Macquarie’s ongoing work to understand transition risks under various decarbonisation scenarios, it noted in its July 2020 TCFD report that Macquarie’s limited lending exposures to the coal sector will run off over the next few years. MAM’s Macquarie Infrastructure and Real Assets (MIRA) business has also restricted investments in businesses with exposure to coal.

For further details visit the ‘Addressing Climate Change’ section on our Macquarie Group’s  website.