Northern Trust Asset Management has withdrawn from Climate Action 100+ and the Net Zero Asset Managers (NZAM) initiative, marking its departure from two key global climate engagement initiatives. This makes it the third major US asset manager to leave NZAM and highlights a growing trend among large firms opting to manage sustainability efforts independently.
A spokesperson for Northern Trust explained that the decision reflects the company’s confidence in its ability to manage risks and engage with portfolio companies independently. “We believe we can effectively manage material risks and engage with portfolio companies to safeguard and grow our clients’ capital without relying on external initiatives,” the spokesperson said.
Northern Trust had been an active participant in Climate Action 100+, co-leading engagements with major firms such as the UK’s National Grid and Czech utility CEZ. The firm also contributed to engagement efforts targeting companies including Valero Energy, Bayer, UltraTech Cement, and South32.
The exit follows similar decisions by peers such as BlackRock’s US operation, State Street Global Advisors, and JPMorgan Asset Management to leave climate-focused initiatives. Among US managers, only Wellington remains in Climate Action 100+ with assets exceeding $1 trillion.
Northern Trust’s departure comes amid broader uncertainty around NZAM. Following exits by Vanguard and BlackRock, NZAM recently announced a temporary pause in many of its activities as it reviews its strategy to adapt to shifting global contexts.
Despite leaving the initiatives, Northern Trust emphasised its continued commitment to sustainable investing. The spokesperson noted, “The firm has made and continues to make investments to support our independent stewardship and sustainable investing capabilities.”
In August, Northern Trust hired Paul Clark from UBS Asset Management to head its stewardship efforts and introduced split voting options for pooled fund investors. The firm has also been recognised for its environmental and social voting practices, ranking 33rd in a 2023 ShareAction report and as the second-highest ranked US manager behind Federated Hermes.
Northern Trust’s decision raises questions about the future of collective climate engagement initiatives. As more firms opt to pursue independent strategies, the effectiveness of large coalitions such as Climate Action 100+ and NZAM may come under scrutiny, particularly in a rapidly evolving global landscape.
