23 September 2024

What has NZAOA achieved since 2019? A look at five key milestones

As Alliance members acted on portfolio decarbonisation—with an eye on making an impact in the real economy—knotty topics arose. Beyond development of target-setting methodologies, the Alliance introduced a new standard for sustainable finance by issuing clear positions and calls to action...

Launched in 2019 at the UN Secretary-General’s Climate Action Summit in New York, the UN-convened Net-Zero Asset Owner Alliance is celebrating its fifth anniversary of setting ambition and achieving targets on net-zero investment.

With the bold commitment of reaching net-zero greenhouse gas (GHG) emission in investment portfolios by 2050, members took on the challenge with enthusiasm. In early 2021, the Alliance released its first Target-Setting Protocol, which offered members a framework for setting science-based targets, aligned with the Intergovernmental Panel on Climate Change (IPCC)’s 1.5°C pathways.

As Alliance members acted on portfolio decarbonisation—with an eye on making an impact in the real economy—knotty topics arose. Beyond development of target-setting methodologies, the Alliance introduced a new standard for sustainable finance by issuing clear positions and calls to action on complex policy, such as carbon pricing, the oil and gas sector, and thermal coal. This approach solidified the Alliance and its members as industry role models and sources of thought leadership.

What were the key milestones in that leadership journey? This article covers Alliance’s five course-changing achievements.

1. Five years of growth

The Alliance has seen consistent annual growth. Starting as a group of 12 investors, the Alliance now boasts 88 members, spanning 19 countries across four continents. Over the past five years the Alliance’s collective assets under management (AuM) have nearly quadrupled, from US$ 2.4 trillion to an impressive US$ 9.5 trillion.

Crucially, as the Alliance’s membership has grown, so too has the number of members setting ambitious intermediate targets.

2. Five years of developing cutting-edge methodologies

Building on existing frameworks, the Alliance has persistently advanced methodologies for setting climate targets. This dedication to developing cutting-edge tools culminated with the release of the Alliance’s most comprehensive Target-Setting Protocol v.4 in April 2024. The protocol now covers all private assets and spans nearly the entirety of a member’s investment portfolio, making it one of the most robust frameworks available.

The framework has now been applied by 81 members[2] that represent 98 per cent of Alliance members’ combined AuM. However, targets are not just there to be set, but also to be met....

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