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UN-backed asset owner alliance to drive portfolio companies to carbon
neutrality by 2050
In one of the boldest actions yet by the world’s
largest investors to decarbonize the global economy, an alliance of the world’s
largest pension funds and insurers – responsible for directing more than US$ 2.4
trillion in investments – has today committed to carbon-neutral investment
portfolios by 2050.
This commitment by the newly launched, United Nations-convened Net-Zero
Asset Owner Alliance was announced today at the UN Secretary-General’s Climate
Action Summit, which brought together governments, companies and civil society
to strengthen commitments and accelerate the implementation of the Paris
Agreement on Climate Change.
The Net-Zero Asset Owner Alliance is an example of investors stepping up to
protect people and planet with the knowledge that companies that transform
their businesses to deliver a low carbon economy will benefit most from the
opportunities presented by climate change.
Inger Andersen, Executive Director of the UN Environment Programme (UNEP) said, “There are no short-cuts to decisive climate action. We need to take a longterm view. I applaud the leadership of the investors in this Alliance. Their
commitment sends a strong signal that financial markets and investors are
listening to science, and moving us to a path of resilience and
sustainability.”
Asset owners – so called because they are the principal holders of retirement
savings or are insurance companies investing their customers’ premiums –
represent some of the largest pools of capital on the planet. Their investment
portfolios are highly diversified and exposed to all sectors of the global economy.
Concerned about the disruptive impacts that unabated climate change will have
on societies and economies, now and in the future, responsible asset owners are
powerful allies in global action to fight climate change and limit the rise in global
temperature to no more than 1.5°C warming.
As long-term investors who must look far into the future to fund their liabilities,
asset owners are keen to ensure that the global economy prospers, that climaterelated risks are addressed, and that opportunities to invest in a cleaner
tomorrow are captured.
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. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension,
Storebrand, and Zurich have joined as founding members.
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).
“Mitigating climate change is the challenge of our lifetime. Politics, business
and societies across the globe need to act as one to rapidly reduce climate
emissions. We, as asset owners, will live up to our responsibility and, in
dialogue with the companies in which we invest, steer towards low-carbon
business practices. We’ve already started and, by 2050, our portfolios will
be climate neutral,” said Oliver Bäte, Allianz’s CEO.
The members of the Alliance will immediately start to engage with the companies
in which they are investing to ensure they decarbonise their business models.
Initiatives such as the UN Global Compact “Business Ambition for 1.5°C — Our
Only Future” campaign will be a clear partner in mobilising corporations to
commit to net zero emissions. The Alliance will also collaborate with other
initiatives, such as the Investor Agenda, Science Based Targets initiative, Climate
Action 100+, and the newly announced 2050 Ambition Alliance.
The members of the Alliance will hold themselves publicly accountable on their
progress by setting and publicly reporting on intermediate targets in line with
Article 4.9 of the Paris Agreement. By committing to transitioning their
investment portfolios to net-zero greenhouse gas emissions by 2050, asset
owners are significantly raising the bar for other investors, industry associations
and, importantly, the global economy.
“The Net-Zero Alliance is the recognition that institutional investors
collectively have an important role to play in fostering the energy transition
the world needs. For investors like CDPQ, there are so many opportunities to
earn commercial returns by investing in low-carbon solutions and to work
with portfolio companies to decarbonize,” said CDPQ CEO, Michael Sabia.
“Combined with the necessary changes in public policies, investors’ actions
will induce real change in every sector.”
To have maximum impact, existing Alliance members actively encourage
additional asset owners to join them in their quest to decarbonise investment
portfolios and achieve net zero emissions by 2050.
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