National Trust, ABP and TPT join net-zero asset group

The National Trust for Places of Historic Interest or Natural Beauty, Europe’s largest pension fund ABP, the Church of Sweden, South Yorkshire Pension Fund, Wiltshire Pension Fund and TPT Retirement Solutions – collectively representing $617bn in assets under management – are new signatories to the Paris Aligned Investment Initiative’s, Net Zero Asset Owner Commitment.

The Paris Aligned Investment Initiative is a collaborative investor-led global forum enabling investors to align their portfolios and activities to the goals of the Paris Agreement. The asset owner Commitment will see the pension funds decarbonise their investment portfolios by 2050 or sooner and increase investment in climate solutions, in line with a 1.5C net-zero emissions future. They must also set interim targets for decarbonisation and investment, and undertake policy advocacy and engagement, and voting in line with net zero goals.

The funds will be using ‘Net Zero Investment Framework’ as the practical basis for delivery, in maximising the contribution they make to tackling climate change. The six investors making the commitment today join a larger group of 38 existing investors – both asset owners and asset managers – representing $8.5tr in assets that are already using the Framework.

The current Framework provides metrics and methodologies for four asset classes (sovereign bonds, listed equity and corporate fixed income and real estate), with work already underway through the Paris Aligned Investment Initiative to establish approaches for infrastructure and private equity. The initiative is today also launching a workstream to define how to align to net-zero for derivatives as an asset class, and broadening the scope of strategies and asset classes covered by the Framework,

The Paris Aligned Investment Initiative is also now collaborating with the Partnership for Carbon Accounting Financials (PCAF), a collaboration of financial institutions working together to develop a harmonised approach to measuring and disclosing greenhouse gas emissions of loans and investments. PCAF is the leading accounting approach underpinning the Net Zero Investment Framework, and the two initiatives will work together to develop greenhouse gas accounting methodologies for asset classes such as sovereign bonds, accounting for carbon removals/sequestered emissions and technical issues such as aggregation of Scope 3 emissions.

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