Ninety One, SA’s largest private sector asset manager, has appointed Nazmeera Moola as its chief sustainability officer, a newly created role that will require its former head of SA investments to oversee initiatives across its global operations.
Moola, who joined Ninety One in mid-2013, will also be responsible for overseeing the asset manager’s advocacy and engagement with investee companies on their transition towards achieving net-zero carbon emissions by 2050. That will require her to engage with the more than 1,000 holdings the firm has across its portfolios on how they are reducing emissions, about 50% of which stem from just 23 companies.
Moola will also be tasked with mobilising new capital dedicated to funding the worldwide transition to net-zero emissions, particularly in emerging markets like SA, where the firm was founded.
“We are looking at how we can more actively support transition through established funds like our EM debt funds,” Moola told Business Day. “It is very much about working with those high emitting companies to understand what their transition plan is and whether it’s viable. It’s also about helping develop new strategies that will deploy capital into this space.”
Moola began her career as an economist at Merrill Lynch in SA and London after graduating from the University of Cape Town with a bachelor of business science degree. She joined Ninety One in 2013 from Macquarie First South, now wholly owned by the Macquarie Group, where she was head of macroeconomic strategy. She is a CFA charterholder and is also a member of the SA Presidential State-Owned Enterprises Council, as well as a trustee of the Constitutionalism Fund.
Ninety One, which was spun out of Investec in March 2020, has been a vocal advocate of the transition to net-zero carbon emissions by 2050 though it has also advocated for a so-called just transition for emerging markets, which it believes should be granted more time to decarbonise economies. In July, it became the first SA signatory to the Net Zero Asset Managers Initiative, which supports institutional investing aligned with the global goal of achieving net zero emissions by 2050 or sooner.
This comes at a time when banks and asset managers are under pressure from shareholder activists, climate lobbyists and investors to take more proactive steps to mitigate climate change by curbing funding for carbon-intensive industries and companies.
Moola says the default position of the asset management industry until now has been to construct portfolios with low current emissions, resulting in many firms simply cutting their investments in carbon-intensive companies. Ninety One has instead argued that asset managers should use their capital and influence to engage with such companies to help facilitate their transition to net zero.
“If we’re going to tell our investors not to look at current carbon composition in portfolios what we then need to do is give them something else — and the something else we’re trying to push for is an assessment of companies’ transition plans,” said Moola. “We believe that in three years’ time there will be some market standard of transition plan assessment that will look like a credit score, but that doesn’t exist at the moment so we have to do the work ourselves.”
During the 26th UN Climate Change Conference (COP26) held in Glasgow, Ninety One CEO Hendrik Du Toit told Business Day that focusing simply on cutting carbon-intense emerging economies from portfolios would not result in real-world carbon reduction as developing nations only account for a small proportion of most global equity portfolios.
Du Toit said such an investment strategy would only serve to starve emerging markets of the very capital they need to fund their transition to more sustainable power and energy systems.
“We cannot pretend that decarbonising portfolios is the same as decarbonising the world and want to ensure that no-one is left behind, including emerging markets,” Du Toit reiterated on Monday. “Finance has a vital role to play in transitioning the real economy to net zero, and the time to act is now.”
Update: November 15 2021
This story has been updated with new information.
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