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World’s largest investors make commitment to decarbonisation

Published October 29, 2020

World’s largest investors make commitment to decarbonisation

Thirty of the world’s largest investors have made a collective commitment to decarbonise their portfolios in line with the Intergovernmental Panel on Climate Change (IPCC) 1.5 °C scenario for the next five years.

As part of the UN-convened Net-Zero Asset Owner Alliance, these investor members, which hold $5 trillion assets under management, aim to reduce their GHG emissions 16-29% by 2025 from 2019. At the start of 2021, members shall set individual targets based on current levels of emissions in their portfolios, with some already on the path to net zero and other committing to large reduction targets. The aim is to transition investment portfolios to net zero GHG emissions by 2050 through advocating for the low-carbon transition of economic sectors in line with science and under consideration of social impacts.

“Reaching net-zero is not simply reducing emissions and carrying on with the business models of today. There are profound changes and opportunities that will come from the net-zero economy, we see new business opportunities and strong wins for those who are ready to lead,” said Günther Thallinger, Alliance Chair and Member of the Board of Management, Allianz SE.

Alliance members are not interested in divestment, but rather they’re signalling to the companies they own that an adjustment of business models is needed to cut emissions. Government action is also necessary to help push these efforts forward. Different approaches shall be employed, tailored to each member, but targets will be put in place that suit individual institutions but that can also be aggregated for transparent tracking and reporting.

For more details on the Net-Zero Asset Owner Alliances plans, take a look at their 2025 Target Setting Protocol.