We are an international group of 29 institutional investors (as of 3rd August 2020) delivering on a bold commitment to transition our investment portfolios to net-zero GHG emissions by 2050.
Representing nearly $ 5.0 trillion assets under management, the United Nations-convened Net-Zero Asset Owner Alliance shows united investor action to align portfolios with a 1.5°C scenario, addressing Article 2.1c of the Paris Agreement.
The Alliance was initiated by Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and SwissRe. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich have joined as founding members.
Aviva, AXA, CNP Assurances, Fonds de Réserve pour les Retraites (FRR), Generali, the Church of England, Munich Re, ERAFP, KENFO, Wespath, PFA pension, SCOR, MP Pension, Danica Pension, the United Nations Joint Staff Pension Fund, the David Rockefeller Fund, and Cbus.
Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment, the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).
THE ALLIANCE COMMITMENT
Asset Owners of The Net Zero Asset Owner Alliance commit ourselves and will work to lead others to the highest ambition to date in driving sustainable economies. The Alliance announced its ambition at the UN Secretary-General’s Climate Summit in New York on September 23rd, 2019 in the form of the following commitment:
“The members of the Alliance commit to transitioning their investment portfolios to net-zero GHG emissions by 2050 consistent with a maximum temperature rise of 1.5°C above pre-industrial temperatures, taking into account the best available scientific knowledge including the findings of the IPCC, and regularly reporting on progress, including establishing intermediate targets every five years in line with Paris Agreement Article 4.9.
In order to enable members to meet their fiduciary duty to manage risks and achieve target returns, this Commitment must be embedded in a holistic ESG approach, incorporating but not limited to, climate change, and must emphasize GHG emissions reduction outcomes in the real economy.
Members will seek to reach this Commitment, especially through advocating for, and engaging on, corporate and industry action, as well as public policies, for a low-carbon transition of economic sectors in line with science and under consideration of associated social impacts.
This Commitment is made in the expectation that governments will follow through on their own commitments to ensure the objectives of the Paris Agreement are met.”
WHY THE NET ZERO ASSET OWNER ALLIANCE?
- Asset Owners have a unique role in the global economy and financial systems. We can drive the development of industry best practice through our investment mandates.
- As pension funds and insurance companies, we have long-term investment horizons and liabilities. We are not only acutely vulnerable to the systemic disruptions that climate change will unleash on ecosystems, societies, and economies, but also have a key role to play in catalysing decarbonisation of the global economy and investing in climate-resilience.
- Recent years have seen an unprecedented surge in investor concern, rhetoric, and action on climate change, spanning the various spheres of influence that investors have at their disposal: their portfolios, their own transparency, and the regulatory frameworks established by public policy.
- As a result, many investor and asset owner initiatives focusing on climate change exist today. While many of these initiatives are worthwhile and deserve further strengthening and promotion, their respective impacts will benefit from greater alignment and coordination through a joint and lasting Asset Owner-led alliance.
- The Alliance will seek to work with and enhance a range of other existing initiatives including
- Science-based Targets Initiative
- Climate Action 100+
- The Investor Energy & Climate Action Toolkit
- The Investor Agenda
- It is against this background that the Alliance now aims to instil in the global investment industry the required level of climate ambition; one that is anchored in asset owners’ own accountability. AO actions that are based on and guided by objective, authoritative science will emphasise GHG emissions outcomes in the real economy.
- The Alliance is intended to scale rapidly to achieve a critical mass of purposeful investors.
- The Alliance will accompany AOs throughout the process of aligning their portfolios to the needs of an economy that is compatible with a stable climate. A journey which ignited in Paris in 2015 and needs ratcheting up through to 2020 and beyond.
- The Alliance will make significant progress towards delivering on the Paris Agreement Article 2.1c: “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.
HOW TO ACHIEVE PARIS ALIGNMENT
The UN-convened Alliance will utilise state-of-the-art tools and align with various initiatives led by Asset Owners who have demonstrated leadership on the topic of decarbonisation. In more detail, potential actions would emphasise:
- Investor ambition and target-setting at portfolio level – reporting of contribution to progress in a sector-specific way
- Impact on the real economy and emissions – to the extent methodologies can be developed for this.
- Implementation via a holistic ESG approach for measuring and managing associated impacts.
- Joint engagement, and monitoring of engagements, based on the most authoritative, credible scientific input, to ensure consistency of messaging and necessary ambition. This will build on existing active ownership best practice already under development – such as ClimateAction100+.
Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment, the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). The members of the Steering Committee, which guides the work of the Alliance, can be found here.