Source: Small Island Developing States
23 September 2019: An alliance of the world’s largest pension funds and insurers committed to achieve carbon-neutral investment portfolios by 2050. Participating pension funds and insurers launched the UN-convened ‘Net-Zero Asset Owner Alliance’ at the UN Secretary-General’s Climate Action Summit.
Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark and Swiss Re initiated the Alliance at the beginning of 2019. Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand and Zurich have now joined as founding members. The Alliance brings together pension funds and insurers that are responsible for directing over USD 2.4 trillion in investments. These asset owners represent some of the largest pools of capital in the world and typically have highly diversified investment portfolios that are exposed to all sectors of the global economy.
Investors in the Alliance are listening to science and moving us to a path of resilience and sustainability.
Allianz’s CEO, Oliver Bäte, recognized climate change mitigation as “the challenge of our lifetime,” and said business and societies around the world “need to act as one to rapidly reduce climate emissions.” Bäte said as asset owners “will live up to [their] responsibility” and, in dialogue with the companies in which they invest, “steer towards low-carbon business practices.” He stressed that efforts are already underway and asset owners will achieve climate-neutral portfolios by 2050.
CDPQ CEO, Michael Sabia, said there are “many opportunities to earn commercial returns by investing in low-carbon solutions” and working with portfolio companies to decarbonize. He emphasized that investors’ actions can play an important role in fostering the needed energy transition and inducing “real change in every sector.”
Alliance members have already begun engaging with companies to ensure that they decarbonize their business models and transition investment portfolios towards net zero greenhouse gas (GHG) emissions by 2050. Members will hold themselves accountable by setting and publicly reporting on targets that are aligned with Article 4.9 of the Paris Agreement on climate change, which requires Parties to communicate Nationally Determined Contributions (NDCs) every five years. The Alliance will collaborate with other initiatives in its efforts to mobilize corporations to commit to net zero emissions, including the 2050 Ambition Alliance, Investor Agenda, Climate Action 100+ and the Science Based Targets initiative.
The UN Environment Programme Finance Initiative (UNEP FI) and the Principles for Responsible Investment convene the Alliance as part of the Mission 2020 campaign, led by former UNFCCC Executive Secretary Christiana Figueres. UNEP Executive Director Inger Andersen applauded the leadership of the investors in the Alliance. Andersen said 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.” [UNEP Press Release] [Alliance Website] [Quotes from Alliance Members] [Alliance Brochure] [SDG Knowledge Hub Story on Climate Action Summit]