Thirty of the world’s largest investors with $5tr in assets under management have collectively agreed on concrete portfolio decarbonisation targets that follow the Intergovernmental Panel on Climate Change (IPCC) 1.5 C scenario for the next five years.

The UN-convened Net-Zero Asset Owner Alliance members are publishing the draft 2025 Target Setting Protocol, laying out plans for a substantial decoupling of asset owners’ portfolio GHG emissions from the global economy.

In the first quarter of 2021, individual Alliance members will set their own portfolio targets from different starting points with respect to the level of carbon emissions currently contained within their portfolios. Several Alliance members will set large reduction targets, while others have already made substantial progress in their journey to net-zero, therefore the reductions required for their portfolios will be at the lower end of the range, while for some a lower 2025 target may reflect geographic or policy constraint that require them to decarbonize more slowly in early years.

The first steps towards Alliance commitments are twofold: transitioning investment portfolios to net-zero GHG emissions by 2050; and achieving this through advocating for, and engaging on corporate action, as well as public policies, for the low-carbon transition of economic sectors in line with science and under consideration of social impacts.

Günther Thallinger, Alliance chair and member of the board of management, Allianz SE, said: “Alliance members start out by changing themselves and then reach out to various companies to work on the change of their businesses. Reaching net-zero is not simply reducing emissions and carrying on with the business models of today. There are profound changes and opportunities that will come from the net-zero economy, we see new business opportunities and strong wins for those who are ready to lead.”

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