Set a Net-Zero Target
The Investor Agenda encourages investors to set science-based portfolio emissions reduction targets consistent with achieving global net-zero emissions by 2050 or sooner, with credible intermediate targets.
The following initiatives and resources are all endorsed by the Founding Partners of The Investor Agenda:
- Net Zero Asset Managers initiative
- The United Nations-convened Net-Zero Asset Owner Alliance and the Target-Setting Protocol
- The Science Based Targets initiative for financial institutions
- Paris Aligned Asset Owners initiative Net Zero Investment Framework
Net Zero Asset Managers
The Net Zero Asset Managers (NZAM) initiative supports a group of international asset managers committed to supporting and investing in line with the goal of net zero greenhouse gas emissions by 2050 or sooner, consistent with their fiduciary duty to their clients and beneficiaries. The initiative is designed to help investors mitigate the material financial risks of climate change in their portfolios and to realize the enormous benefits of investing in the economic transition to net zero.
NZAM is managed globally by a Steering Committee represented by six Investor Agenda Founding Partners: Asia Investor Group on Climate Change (AIGCC), CDP, Ceres, Investor Group on Climate Change (IGCC), Institutional Investors Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI). The initiative also has an Advisory Group of investors who works closely with the Steering Committee.
Visit www.netzeroassetmanagers.org to learn more.
The United Nations-convened Net-Zero Asset Owner Alliance and the Target Setting Protocol
The UN-Convened Net-Zero Asset Owner Alliance (NZAOA) is a member-led initiative of institutional investors committed to transitioning investment portfolios to net-zero emissions by 2050.
Launched at the UN Climate Action Summit in September 2019, the NZAOA was the first investor initiative in the financial industry to set intermediate targets aligned with the Paris Agreement. With members from 19 countries, the NZAOA is convened by UNEP FI and the Principles for Responsible Investment and is supported by WWF and Global Optimism.
The Target-Setting Protocol governs how NZAOA members set their intermediate climate targets on a path to achieving net-zero greenhouse gas emissions in their investment portfolios by 2050, as per the Alliance’s Commitment.
The NZAOA’s fourth Progress Report revealed significant progress towards net-zero commitments, including reductions in absolute financed emissions of at least 6% on average annually. This demonstrated that members are decarbonizing their portfolios in line with 1.5°C pathways, as defined by the Intergovernmental Panel on Climate Change.
Visit United Nations-convened Net-Zero Asset Owner Alliance website to learn more.
The Science Based Targets initiative for financial institutions
On October 1, 2020, the Science Based Targets initiative launched a new framework to allow financial institutions – including banks, investors, insurance companies, pension funds, and others – to set science-based targets to align their lending and investment activities with the Paris Agreement.
The SBTi also launched a new tool for temperature scoring and portfolio coverage.
Visit the SBTi for financial institutions website to learn more.
Paris Aligned Asset Owners initiative
Paris Aligned Asset Owners (PAAO) initiative supports an international group of asset owners who have made individual commitments to support the goal of reducing greenhouse gas emissions to net zero by 2050 or sooner, in line with global efforts to limit temperature warming to 1.5 degrees Celsius above pre-industrial levels. Consistent with their fiduciary obligations to clients and beneficiaries to avoid financial risk and to maximize long-term value of assets, these asset owners have made individual commitments to transition their investments to achieve net zero portfolio emissions.
The initiative is governed by a Steering Group of asset owners and supported by four Investor Agenda Founding Partners: Asia Investor Group on Climate Change (AIGCC), Ceres, Investor Group on Climate Change (IGCC), Institutional Investors Group on Climate Change (IIGCC).
Visit www.parisalignedassetowners.org to learn more.
Net Zero Investment Framework
The Net Zero Investment Framework is the most widely used global reference framework for investors in all regions to develop individual net zero strategies and transition plans. Investors use the framework to deliver on their Net Zero Asset Managers (NZAM) or Paris Aligned Asset Owners (PAAO) commitments – although its reach and use extends to investors outside of these initiatives.
The Net Zero Investment Framework was updated and published in June 2024 as ‘NZIF 2.0’. It offers guidance for most of the traditional asset classes in an average investor portfolio including sovereign bonds, real estate, infrastructure, and private equity. The ‘NZIF 2.0: Summary Guide’ provides ahigh level overview of what is necessary to understand NZIF. NZIF is not a commitment platform or an initiative. It is a resource to support investors in NZAM and PAAO and beyond implement their net zero commitments and addressing climate-related financial risks and opportunities.
Visit the NZIF resource page to learn more. For more information, please email The Investor Agenda at info@theinvestoragenda.org