The Net Zero Asset Managers (NZAM) initiative, a coalition of investment managers representing trillions of dollars in assets and committed to achieving net-zero greenhouse gas emissions by 2050, has announced a suspension of its primary activities. This decision comes as the group adapts to a shifting political and regulatory landscape.

The move follows BlackRock’s departure from NZAM. In a letter to clients last week, the world’s largest asset manager cited “confusion regarding BlackRock’s practices” and resulting “legal inquiries from various public officials” as reasons for its withdrawal. In November 2024, BlackRock was named in a Texas lawsuit along with Vanguard and State Street, claiming their climate action was a breach of antitrust laws through climate activism that reduced coal production and boosted energy prices.

The suspension also appears to be an attempt to avoid a similar mass exodus to that experienced by the Net-Zero Banking Alliance (NZBA), a related UN-backed coalition that saw all major US banks exit within a month of Goldman Sachs’ initial departure in early December (see JP Morgan becomes sixth US bank to leave net zero alliance).

Anti-ESG lobby

These departures from net-zero coalitions occur amidst sustained pressure on financial institutions participating in such initiatives. A vocal anti-ESG movement, comprised of Republican politicians in the US, has asserted that these climate-focused efforts constitute anti-competitive or collusive behavior, and acting against the best fiduciary interests of clients.

In its statement, NZAM explained that “recent developments in the US and different regulatory and client expectations in investors’ respective jurisdictions have led to NZAM launching a review … to ensure NZAM remains fit for purpose in the new global context.”

Launched in December 2020 with 30 asset managers overseeing approximately $9 trillion in assets under management (AUM), NZAM had grown to include over 325 signatories and more than $57 trillion in AUM by early 2025.

NZAM signatories had agreed to a set of commitments to support net-zero GHG emissions by 2050, including collaboration with asset owner clients on decarbonization goals, establishing and reviewing interim net-zero targets for managed assets, tracking portfolio emissions, prioritizing emissions reductions in invested sectors and companies, and implementing stewardship and engagement strategies (including voting policies) consistent with the 2050 goal.

Voluntary initiative

During its review, NZAM will suspend the tracking of signatory implementation and reporting. It will also remove its commitment statement, list of signatories, targets, and related case studies from its website.

NZAM stated: “As a voluntary initiative, NZAM has successfully supported investors globally … in line with their fiduciary duties and clients’ long-term financial objectives. NZAM looks forward to continuing to play this constructive role with investors around the world.”

We asked Harriet O’Brien, ESG consultant at Danesmead, for her views on the recent departures from the net zero alliance. She said: “With Blackrock gone, and in the wake of the mass exodus from NZBA in recent months, NZAM is forced to reflect on its future. Whilst the original mission of NZAM was based on well-founded principles, unfortunately, one size does not fit all in the current day of polarised views on climate change and ESG. It’s time for change, and for more flexibility.”