- More than 250 asset managers rejoin NZAM after a year long suspension, but U.S. participation drops sharply following political backlash and antitrust concerns.
- Updated commitment removes mandatory net zero portfolio alignment and short-term targets, shifting responsibility to individual firms.
- Asset owners representing over $3.7 trillion back the initiative, reinforcing investor demand for climate risk disclosure and transition strategies.
The Net Zero Asset Managers (NZAM) initiative relaunched Wednesday with more than 250 signatories, marking the return of one of the world’s most influential climate finance alliances after a year long suspension and significant political scrutiny in the United States.
The relaunch follows a six-month strategic review and comes after several major U.S. firms withdrew amid Republican-led criticism that climate alliances could breach antitrust rules. BlackRock exited the initiative in early 2025, triggering further departures from Capital Group, JPMorgan Asset Management and Franklin Templeton.
Despite looser membership requirements designed to broaden participation, only 12 U.S. firms rejoined, down from 44 prior to the suspension. State Street Investment Management and Wellington Management signed back on through their European operations rather than U.S. entities.
Rules softened to reflect political and market realities
The revised commitment statement removes the explicit requirement for members to align portfolios with net zero emissions by 2050 and eliminates mandatory interim targets. Instead, signatories independently set climate targets, develop implementation strategies and report annually on progress.
Rebecca Mikula-Wright, Chair of NZAM’s Steering Committee, framed the relaunch as evidence of continued investor commitment. “The strong participation in today’s relaunch reflects the value NZAM signatories find in having a credible platform to demonstrate to their clients how they are addressing climate-related financial risks and capturing transition opportunities,” she said.
NZAM said the updated framework remains anchored in the objectives of the Paris Agreement while acknowledging regional regulatory and fiduciary constraints. Commitment actions have been streamlined from ten to seven to clarify the levers asset managers can use.
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Climate investing shifts beyond portfolio decarbonisation
The revised framework reflects a broader evolution in climate investing strategy.
“The new statement reflects the evolution of climate investing from an original focus on decarbonising portfolios, towards a broader set of approaches that includes decarbonisation alongside transition investing, climate solutions, adaptation and resilience,” said Dan Grandage, chief sustainable investment officer at Aberdeen Investments.
This shift aligns with growing investor focus on financing transition technologies, infrastructure resilience and climate adaptation rather than solely reducing portfolio emissions exposure.
Asset owners reinforce pressure for climate disclosure
NZAM’s relaunch also received backing from the asset owner community. More than 50 asset owners representing over $3.7 trillion in assets issued a public statement encouraging asset managers to participate, noting the initiative aligns with “key principles that help guide best practice investment strategies.”
The alliance provides a voluntary global platform for asset managers to disclose climate targets and demonstrate how climate-related financial risks are integrated into fiduciary decision-making.
“Asset managers participating in NZAM send a strong signal to clients, regulators, and other key stakeholders that they are forward-looking, transparent investors, committed to managing climate-related financial risk and opportunity,” Mikula-Wright said.
Governance tensions reshape climate finance coalitions
The relaunch highlights growing divergence between U.S. political dynamics and global climate finance priorities. European regulators continue to tighten sustainability disclosure requirements, while U.S. asset managers face intensifying legal and political scrutiny over ESG commitments.
For global investors, the revised NZAM structure offers flexibility while preserving a shared framework for climate risk management and transition investment.
The alliance’s survival, albeit in modified form, reflects a pragmatic shift in sustainable finance. As capital markets navigate political pressures, fiduciary obligations and climate transition risks, NZAM’s next phase will test whether voluntary frameworks can sustain momentum toward net zero while accommodating divergent regulatory environments.
For asset managers, the message is clear: climate risk remains a financial risk, and investors are expected to demonstrate how they are managing it.
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