State Street Corp’s (STT.N) asset-management arm said it would join other big investment firms pushing to limit greenhouse gas emissions to net zero by 2050, part of a rush by large companies to embrace climate goals.
PepsiCo Inc (PEP.O) and Ikea stores owner Ingka Group also announced on Tuesday new efforts ahead of a U.S.-led virtual climate summit with world leaders starting Thursday.
Scientists and activists expect U.S. President Joe Biden to pledge to cut greenhouse gas emissions in half by 2030, the first upgrade of the national climate target since 2015.
State Street, one of the largest passive fund managers with some $3.6 trillion in assets, was to announce its commitment at a Ceres-sponsored virtual conference on Tuesday where U.S. Climate Envoy John Kerry is scheduled to speak.
State Street will be among 14 new signatories to the Net Zero Asset Managers initiative that will now include $37 trillion in assets including prior backing from its rivals BlackRock Inc (BLK.N) and Vanguard Group Inc.
Net zero refers to a balance between emissions produced and those taken out of the atmosphere through technologies like carbon capture. Signatories pledge to set interim reduction targets for 2030 and report progress under common standards.
The net-zero-by-2050 goal “is consistent with our commitment to drive long-term value on behalf of our clients” said Cyrus Taraporevala, CEO of State Street Global Advisors, the company’s asset-management arm.
The corporate support makes the U.S. ambition realistic, said Mindy Lubber, president of climate advocacy group Ceres, and contrasts with executives’ long-running skepticism, she said. As the risks posed by climate change become more apparent, Lubber said, “The light bulbs are going off across the private sector.”
Lubber and others cautioned many questions remain such as exactly what financial disclosures should be required or whether executives should account for how customers use their products like fuel.
Pepsi said it will expand its regenerative farming programs to 7 million acres, or roughly all the land used to grow crops for its products, including adding more than 500,000 acres in the United States by the end of this year.
Ingka Group, the largest owner of Ikea furniture stores, said it will spend 4 billion euros ($4.8 billion) on wind and solar power production, in addition to 2.5 billion euros it previously spent on the area.
($1 = 0.8309 euros)