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September 27, 2022updated 03 Oct 2022 4:38pm

Exclusive: Investment consultancy exits net-zero alliance

US-based Meketa is leaving the Net Zero Investment Consultants Initiative (NZICI), the latest in a series of blows to Mark Carney’s grand vision.

By Vibeka Mair

NZICI, net-zero
Walking out. Mark Carney’s Gfanz is facing considerable pressure from alliance members. (Photo by Leon Neal – WPA Pool/Getty Images)
  • A founding member of the Net Zero Investment Consultants Initiative (NZICI) has left the alliance.
  • It comes as pressure has mounted on Glasgow Financial Alliance for Net-Zero (Gfanz) amid questions concerning its ability to keep all groups aligned.
  • NZICI was already marked by the lack of influential US consultancy members such as Aon and Mercer.

US-based investment consultancy Meketa is leaving the Net Zero Investment Consultants Initiative (NZICI), part of Mark Carney’s Glasgow Financial Alliance for Net-Zero (Gfanz), Capital Monitor has learnt.

It comes as pressure mounts on Gfanz as the umbrella group struggles to keep all the net-zero alliances on page. Two pension funds have left Gfanz’s Net-Zero Asset Owner Alliance and banks are threatening to leave the Net Zero Banking Alliance (NZBA), according to the Financial Times.

In a statement written to Capital Monitor, Meketa’s confirmed it was leaving the alliance.

“Meketa has decided to temporarily withdraw from the NZICI and will seek to adopt NZICI’s global reporting framework at a more appropriate time. At Meketa’s suggestion, NZICI members will consider creating a forum for those wishing to affiliate, and share learning and development of best practices with, NZICI.”

On the ropes

Meketa, was one of 12 investment consulting firms, advising on assets of $10trn between them, that launched the NZICI, in September last year, under the Gfanz umbrella.

At the time, Meketa posted a press release on the news. Sarah Bernstein, head of sustainability at Meketa, said: “Given the urgency with which climate change must be tackled, investment consultants such as ourselves want to provide investment advisory services to support asset owners as they seek to implement investment strategies to help limit global warming to a maximum of 1.5C in accordance with the Paris Climate Agreement, and work to reduce our own corporate carbon footprint.”

Although the consultancy didn’t state the reasons for its departure, a person close to NZICI said it was twofold. New criteria announced by Race to Net Zero, which provides accreditation to Gfanz’s seven net-zero initiatives for financial institutions, were not received well. Also, NZICI mandated members to embed net-zero considerations in their advice when some clients in the US “were not ready for that discussion”. 

Meketa’s Bernstein is chair of the Investment Consultants Sustainability Working Group – US, “a collaboration among investment consulting firms to advance sustainable investment practices across the investment industry”. The group contains high-profile US members such as Aon and Mercer, which are not members of NZICI. This is despite Oliver Wyman, which shares the same owner as Mercer (Marsh & McLennan), being a knowledge partner of Gfanz.

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NZICI now only has only two US members: Wilshire and Cambridge Associates.

The Race to Zero project appears to be under pressure from all sides. Capital Monitor, for example, broke the news this month that a coalition of climate-focused non-government organisations (NGOs) was urging the NZBA to make firmer public commitments to achieving net zero emissions.

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