Following historically high global temperatures in 2020, the Net-Zero Asset Owner Alliance publishes 2025 decarbonization targets
 
Jan 15, 2021
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Final Target Setting Protocol raises curtain on release of individual member targets

Geneva, 14th January 2020 – Following the hottest year on record in 2020, thirty-three of the world’s largest investors have committed to setting and reporting on 2025 targets to support the transition to net-zero greenhouse gas emissions by 2050.

Publication of the Inaugural 2025 Target Setting Protocol – the result of over two months of public consultation on the preliminary 2025 Target Setting Protocol published 13th October 2020 – comes as individual members of the UN-convened Net-Zero Asset Owner Alliance begin to publish their own 2025 decarbonization targets within a 16-29 per cent range. Target-setting through the Protocol was developed by members of the Alliance and follows a very ambitious, rigorous and unique approach.

The targets are structured in four pillars (see Figure 1. below): engagement; portfolio decarbonization targets; sectoral targets; and climate positive investments. With asset owners at the pinnacle of the investment universe, establishing visible targets for engagement with asset managers, corporates, industry groups and policymakers, is the most impactful way to influence the real economy towards a 1.5°C global goal.

Günther Thallinger, Alliance Chair and Member of the Board of Management Allianz SE, said:

“The founding of the Alliance and the publication of the Protocol has set the net-zero implementation ball rolling. Investors and companies across the globe must follow by publishing their own rigorous, science-based and accountable targets. We, the Alliance members, start out by truly changing ourselves today and then work with other companies to achieve change.”

“Business needs to become sustainable, actually capitalism needs to become sustainable. By changing investment decision-making and including climate neutrality as a shorter-term objective, asset owners are making a big contribution”.

A pioneering initiative based on partnerships

The Alliance has inspired other initiatives to commit to net zero and asks financial institutions, sovereign wealth funds as well as companies operating in high-emitting sectors to commit to net zero, to set science-based targets for 2025 and report against those. The use of science-based short-term targets will be an important guide to inform individual corporate and portfolio trajectories as well as drive engagement action.

The Alliance is working alongside UNEP FI initiatives such as the Principles for Responsible Banking’s Collective Commitment for Climate Action (CCCA) and is part of the high-level COP campaign the Race to Zero.

Writing in the foreword of the Protocol, former UNFCCC Executive Secretary and Founding Partner of Global Optimism, a strategic and scientific partner of the Alliance, Christiana Figueres said:

“Issuing transparent, rigorous and realistic targets, and then committing to report against them in the next 4 years, is at once an extraordinary – and also essential – demonstration of ambition by private sector leaders who exist at the pinnacle of our financial systems.

The Protocol covers multiple asset classes and encompasses even the hardest-to-abate sectors. Taking a sectoral approach means that these investors will be stepping up their work to move high-carbon companies to make the changes required for the net-zero transition.

Figure 1: The four-part target setting structure

The full Target Setting Protocol can be downloaded here.

About the UN-convened Net-Zero Asset Owner Alliance
Convened by UNEP FI and the Principles for Responsible Investment and supported by Global Optimism and the WWF’s Finance Practice, we are an international group of 33 institutional investors (as of 14th January 2020) delivering on a bold commitment to transition our investment portfolios to net-zero GHG emissions by 2050. Representing $5.1 trillion assets under management, the Alliance shows united investor action to align portfolios with a 1.5°C scenario, addressing Article 2.1c of the Paris Agreement. The Alliance is part of the UNFCCC Race to Zero campaign.

Media contact
Oliver Wagg, UNEP FI oliver.wagg@un.org