AB’s Net Zero Commitment

AB supports the Paris Agreement, and we’re committed to aligning our firm with a 1.5 degree Celsius pathway by 2050 while acting in the best interest of our clients. When we first became a signatory to the Principles for Responsible Investment in 2011, we began formalizing our approach to responsible investing, including integrating climate-change considerations in some of our actively managed strategies. For over a decade, AB has engaged with issuers on climate-change risks and opportunities while collaborating with clients, data providers, regulators, industry bodies and other stakeholders to push for progress on climate issues, in the best interest of our clients.

At AB, we believe that climate risk is an investment risk, and that it’s important to consider the material physical and transition risks and opportunities of issuers we invest in. Accurately forecasting cash flows and valuations, incorporating climate-risk considerations when optimizing risk and return, and using the tools available—like net zero—in managing climate change can help our clients benefit from the most current climate risk management techniques.

Consistent with our broader approach to responsibility, our net zero commitment encompasses our operations, and we are working to establish targets to align a range of investments. This commitment is supported by our strategic partnerships and engagement within the global investment community. Net zero is a journey that’s well under way at AB—we’re excited for the next stage of that journey, as we translate our strategy into a structured approach to fulfil our commitment.

When our investment analysts engage with issuers, they speak directly with management, board directors or other key officers, discussing the material ESG issues a company faces. Dialogues include discussions about how companies identify and disclose material ESG issues and how they’re integrating these considerations into their businesses. We engage for insight to understand how companies are identifying, assessing and managing climate change risks and opportunities that are material to their businesses. We engage for action to: advance issuers’ net zero commitments and progress; encourage them to report basic emissions metrics and targets; better understand the feasibility of their goals and assess the thoroughness of their transition plans; and escalate through collaborative engagement, policy advocacy, and proxy voting.

In fact, we’ve already targeted these actions over the last two years via the climate engagements in our annual thematic ESG Engagement Campaigns: 

Our Partnerships and Policy Advocacy

We recognize that climate change is a global challenge that demands a global response. Our deep commitment to combating climate change is evidenced by our history of active involvement in climate-related organizations and initiatives, including our climate policy work and innovative partnership with the Columbia Climate School. Through the Columbia partnership, we aim to shape the next generation of professionals who are striving to address the impact of climate change and develop new solutions.

We also maintain partnerships with other leading climate organizations, including the Asia Investor Group on Climate Change (AIGCC), CDP Worldwide, Climate Action 100+, the Climate Bonds Initiative, Ceres, the Institutional Investors Group on Climate Change (IIGCC) and the Net Zero Asset Managers initiative.

AB’s journey to net zero has been rooted in collaboration and engagement on issues and policy related to climate change and investing. We have engaged in strategic planning and research, and we have spearheaded educational initiatives with the wider industry. Our extensive work with experts from across the climate finance spectrum has helped inform our thoughtful and deliberate approach to deliver our net zero goals.