Brookfield's Net-Zero Commitment
We are aligned with the worldwide goal to limit global warming and have set an ambition to achieve net zero by 2050.
We became a signatory to NZAM in 2021, joining an international group of asset managers committed, consistent with fiduciary duties to clients and beneficiaries, to supporting the goal of net zero emissions by 2050 or sooner. This ambition is in line with global efforts to limit warming to well-below 2 degrees Celsius and to support investment aligned with net zero emissions by 2050 or sooner.
We agreed to set an interim target for a portion of our AUM with the ambition to reduce emissions by 50% by 2030, as well as review our interim target at least every five years. Additionally, our ambition includes an objective to increase the proportion of AUM covered until 100% of Operationally Managed investments1 are included. Our interim emissions target comprises assets across our business groups, including Renewable Power & Transition, Infrastructure, Private Equity and Real Estate. For our in-scope assets, we seek to align interim targets for 2030, consistent with a fair share of the approximate 50% global reduction in emissions—identified as a requirement in the IPCC special report on global warming of 1.5°C. We originally set $147 billion of assets on a path to net zero emissions by 2050 from a 2020 base year.2 In 2022, we increased our target to $201 billion. We shared our progress on adding additional assets to our interim target in our January 2024 NZAM Interim Progress Report.
Since the beginning of 2023, AUM for our business has grown by $126 billion, of which we currently expect to add $62 billion of assets to our NZAM interim target, which would bring our NZAM in-scope assets to $263 billion (approximately 42% of Operationally Managed AUM).3
While Brookfield progresses towards its 2030 interim target, we note that Brookfield’s ability to decarbonize its portfolio relies in part on the rest of the economy transitioning at a pace aligned with countries’ goals and the Paris agreement. We observe that the path to net zero may not always be linear or binary.
Our Decarbonization Focus Over Time
Our approach is underpinned by a recognition that achieving net zero by 2050 or sooner requires significant collaboration between companies, governments and individuals. As our assets develop their decarbonization plans, we seek to progress them toward or align them to science-based pathways, enabling us to increase the scope of assets included in our NZAM interim target. Today, assets within our interim target represent only a portion of our total assets;4 over time, we aim to place all of our Operationally Managed portfolio companies on a decarbonization journey.
We Will Help Accelerate the Transition to Net Zero
We will catalyze companies onto net-zero pathways aligned with the Paris Agreement through our global transition investment strategy, focusing specifically on investments that will accelerate the transition to a net-zero carbon economy.
We Will Collaborate
We will work with leading private-sector initiatives to advance the role of finance in supporting the economy-wide transition, to accelerate capital flows consistent with the Paris Agreement and to promote widespread adoption of decision-useful methodologies to support credible transition planning, analysis and investing.
We Are Committed to Transparency
- We will track and report GHG emissions consistent with GHG Protocol and PCAF standards.
- We will publish decarbonization plans every five years consistent with the Paris Agreement.
- We continue to align our business with the TCFD recommendations and have published our inaugural TCFD disclosures in our 2022 Sustainability Report.
We Will Continue to Pursue Industry-Leading Returns
We will continue to pursue industry-leading returns for our investors, consistent with our long track record of building the backbone of a more sustainable global economy.
1 Aligning our focus to where Brookfield has the ability to drive outcomes, Operationally Managed Investments are defined as all investments where Brookfield has control or significant influence, a transition mandate or otherwise has a level of governance rights to influence outcomes. We actively consider these assets for NZAM purposes. They represent $631 billion of AUM as of December 31, 2023.
2 Aligning our focus to where Brookfield has the ability to drive outcomes, Operationally Managed Investments are defined as all investments where Brookfield has control or significant influence, a transition mandate or otherwise has a level of governance rights to influence outcomes. We actively consider these assets for NZAM purposes. They represent $631 billion of AUM as of December 31, 2023.
3 Expressed as a percentage of Operationally Managed AUM as of December 31, 2023, or 40% only excluding Oaktree and our Insurance Solutions channel.
4 Applicable to Operationally Managed investments.