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Working towards net zero is a next step in our ESG ambition
At our AGM in November 2020, we expressed our ambition to become climate-neutral in our actions, in line with the Paris Agreement, and well ahead of 2050. DWS took the next step by becoming a founding member of the Net Zero Asset Managers (NZAM) initiative in December 2020.
Why NZAM
The NZAM initiative is dedicated to the asset management industry accelerating its transition towards global net zero emissions in investment portfolios on behalf of their fiduciary clients. It is governed by six network partners and sets out an early path for asset managers who have the ambition to become climate neutral by 2050. The NZAM initiative requests setting of specific interim targets, while acknowledging that data and regulatory frameworks are still evolving and that the commitment of clients will also be necessary.
We are keeping our commitment to continue the journey towards a sustainable investing future as part of the wider asset management industry, while operating in a continuously evolving landscape of environmental, social and governance (ESG) considerations, including non-financial data, regulatory frameworks and taxonomies, client demands and commitments.
Our approach to net zero recognizes both our DWS coporate ambition while acknowledging the ever evolving nature of sustainable investing.
As a founding signatory to the NZAM initiative, DWS now sets its 2030 interim target in line with achieving net zero by 2050.
We put 35.4 % of our total AuM as per December 31, 2020 in scope to be managed towards Net Zero[1].
On these overall in-scope assets, we seek to achieve a 50 % reduction in Weighted Average inflation-adjusted financial Carbon Intensity (WACI adj.) related to Scope 1 + 2 emissions[2] by 2030, compared to base year 2019.
The Science Based Targets Initiative (SBTi) provides the reference for DWS on our path to net zero.
DWS is aiming to use the SBTi framework which is considered a credible and robust foundation providing clear guidance on expected assets in scope and target ambition levels. In addition, DWS seeks to continue to consider new standards and continue to work with existing standards, specifically with the Paris Aligned Investment Initiative and the Net Zero Asset Owner Alliance (NZAO).
In this first step, DWS aims to designate those assets in scope for which credible decarbonization methods and data exist.
Implementation measures aiming to achieve the set interim target by 2030
- Translate assets-in-scope target to portfolio-based management actions
- Engage with investee companies and index providers on their net zero target setting
- Work with institutional clients towards developing their net zero commitments and portfolio targets
- Drive the development of innovative products and services aligned with net zero ambitions
- Embed net zero into corporate activities
In parallel, we seek to work with SBTi to underpin the set overall target with a sector-based approach.
DWS aims to further work with clients on our decarbonization goals and on designating more assets in scope step by step in line with further regulation and evolving methodologies.
What we have done so far to embark on the net zero pathway
October 2019: Real Estate minus 50 % CO2 in 2030
We aim to reduce carbon emissions intensity of our European real estate office portfolio by 50 % by 2030 based on reference year 2017.
March 2021: Disclosing the first Climate Report 2020
Our Climate Report is fundamental to enhancing DWS’ non-financial reporting whilst also ensuring that we provide transparent disclosure on climate action on a regular basis going forward. In particular we aim for a strategy which is aligned with key TCFD (Task Force on Climate Related Financial Disclosures) recommendations centered on Governance, Strategy, Risk Management, and Metrics and Targets.
Engagement:
We strongly believe in constructive dialogue to support positive transformation with our investee firms. In June 2021 DWS sent a dedicated engagement letter on net-zero actions to more than 220 companies across different sectors. In the request to the Boards of the addressed companies, it is made very clear that we expect the firms to make a dedicated commitment to become net-zero by 2050 or sooner. DWS also asks for clear Board oversight and responsibility for this path, along with enhanced transparency on their roadmap to climate neutrality. The addressed companies include sectors known for their high levels of carbon emissions such as Oil & Gas, Coal & Mining, Automobile, Chemicals and Retail among others.
