Net-Zero Asset Owner Alliance
The UN-convened Net-Zero Asset Owner Alliance (NZAOA) is a member-led initiative of institutional investors committed to transitioning their investment portfolios to net zero GHG emissions by 2050 – consistent with a maximum temperature rise of 1.5°C.
The Alliance was initiated by Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark and Swiss Re at the beginning of 2019. It was officially launched at the UN Secretary-General’s Climate Ambition Summit in September 2019. Shortly afterward, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich Insurance joined as founding members. The Alliance is supported by WWF and Global Optimism.
Participating members 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 levels, 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 the Paris Agreement Article 4.9. Members also commit to endorse and understand that in order to meet their fiduciary duty to manage risks and achieve target returns, their Commitment must be embedded in a holistic approach to managing sustainability considerations, incorporating but not limited to, climate change, and must emphasize GHG emissions reduction outcomes in the real economy. Members need to seek to reach their commitments, 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.
The Alliance utilises 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 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+.
The Alliance also seeks to work with and enhance a range of other existing initiatives, including: the Science-based Targets Initiative, Climate Action 100+, the Investor Energy & Climate Action Toolkit, and the Investor Agenda. The Alliance recognized that other initiatives will benefit from greater alignment and coordination through a lasting alliance led by asset owners.
