Geneva, 24 January – The UN-convened Net-Zero Asset Owner Alliance (the Alliance) is a member-led initiative of 88 institutional investors committed to transitioning their investment portfolios to net zero GHG emissions by 2050, while prioritising the transition in the real economy. To achieve these goals simulatenously, scaling up investments in climate solutions and technologies—such as carbon dioxide removal (“CDR”[1]) —is imperative.
For real economy actors and investors alike, achieving net zero by 2050 and avoiding the worst impacts of climate change means aligning with science-based 1.5 °C decarbonisation pathways. These pathways are predominantly based on mitigation, but even with all mitigation measures deployed, residual emissions of up to M~7GtCo2e[2] by 2050 remain. This means that even with the highest ambition decarbonisation pathways, there is a need for CDR[3], which will only increase if decarbonisation falters.
Given that current deployment of CDR amounts to a mere 2GtCo2e[4], phasing in investments in carbon removal solutions—both nature-based and technology-based (“novel”) CDR—cannot wait. That is why the Alliance is publishing this request for information, seeking to contribute to capacity building and knowledge sharing, and ultimately investment scaling in this space.
Context and Purpose
The Alliance recognises the challenging investment environment that currently exists for CDR projects. As it stands, there are limitations to CDR solutions with commercial viability, and the long-term demand for CDR is uncertain. Noting these challenges, Alliance members call on asset managers to:
- drive the design of scalable investment vehicles for carbon dioxide removal (where such investments are available and viable) to support the net-zero transition and
- support further work addressing the barriers to investment in this market.
The Alliance is seeking responses from asset managers who have an existing vehicle that meets the requirements listed in the survey or asset managers who intend to invest significantly in the CDR sector. Thus, the Request for Information (RfI) is split into two parts—general questions (for asset managers who are currently investing or seeking to invest in the CDR sector) and vehicle-specific questions (for asset managers with an investment vehicle that meets the requirements outlined in the survey).
By engaging with this work, asset managers will support asset owner clients in meeting their investment needs and priorities, including achieving appropriate risk-adjusted returns in line with their fiduciary duty and net-zero commitments.
The Alliance also recognizes that a more supportive policy environment is required to support the scale-up of investments in CDR and plans further work on the barriers to investment in CDR and on policy solutions that could support this market.
Process
Asset managers should submit their responses via this Microsoft Forms link by 7 March 2025. In case of issues with accessing the form, please contact the Alliance Secretariat. Alliance members will undertake an initial review of the submissions and respond to the asset managers. The asset managers who meet the outlined requirements might be invited to give presentations to the Alliance membership.
Disclaimer: The selection for presentation should not be interpreted as an endorsement by the Alliance nor as a commitment to contribution by any Alliance member. In case of interest in a particular vehicle, Alliance members will undertake individual assessments as per their institution’s processes and requirements. [1] According to IPCC AR6 (2021) “CDR refers to deliberate technologies, practices, and approaches that remove carbon dioxide (CO2) from the atmosphere. CDR also involves durably storing carbon after it has been extracted from the atmosphere, either in reservoirs such as vegetation, soils, geological formations, or the ocean, or in manufactured products“. In addition, IPCC noted “CDR only refers to human activities that intentionally remove CO2 from the atmosphere. It does not include natural CO2 removal (such as through the growth of natural forests).” [2] Emissions Gap Report 2030 (UNEP FI), page 52 [3] The general agreement, as outlined in The State of Carbon Dioxide Removal (2nd Edition, 2024, p. 23) is that to count as CDR, the activity in question must capture carbon dioxide from the atmosphere, not from fossil fuel sources (Principle 1) and durably store it (Principle 2). It must also be a human intervention, in addition to the Earth’s natural processes (Principle 3).