06 November 2024

UNEP FI: Net-Zero Asset Owner Alliance sets the pace on climate ambition, action and transparency in latest Progress Report

As world leaders gear up for negotiations at COP29 in November, the UN-convened Net-Zero Asset Owner Alliance (NZAOA) publishes its fourth Progress Report revealing significant progress towards net zero commitments, including reductions in absolute financed emissions of at least 6% on average annually.

The Net-Zero Asset Owner Alliance (NZAOA), a UN-convened and industry-led initiative with 88 members representing USD 9.5 trillion in AuM, demonstrates its leading role in global climate action in its fourth Progress Report.

• 81 members, with a combined AuM of USD 9.4 trillion (98.9% of the Alliance’s total AUM)¹ have now set intermediate decarbonisation targets.
• The Alliance reports average reductions in absolute financed greenhouse gas emissions of at least 6% annually, consistent with the IPCC’s 1.5°C pathways.
• Nearly all (79) of the members setting targets have chosen to set sub-portfolio targets, which cover 48% or USD 4.3 trillion of members’ total AuM. On average, members targeted a reduction of 26 per cent by 2025 for bonds, equities, real estate, and infrastructure.
• Ahead of COP29 in Baku, and as global emissions continue to rise, asset owners urge policymakers to follow through on their Paris Agreement pledges and implement policies necessary to further the net-zero transition.

Geneva, 30 October 2024: As world leaders gear up for negotiations at COP29 in November, the UN-convened Net-Zero Asset Owner Alliance (NZAOA) publishes its fourth Progress Report revealing significant progress towards net zero commitments, including reductions in absolute financed emissions of at least 6% on average annually. The Alliance calls on governments to implement policies to support further portfolio decarbonisation and the net-zero transition in the wider economy.

Members representing 98.9% of the Alliance’s total assets under management (AuM) have now set Paris-aligned 2025² decarbonisation targets. Members have used the four-pronged framework set out in the Alliance’s Target-Setting Protocol – requiring them to set an engagement target, and at least two out of three of either sub-portfolio, sector or climate solution investments targets.

The 12 new members that have set their targets for the first time in 2024 have all set both their sub-portfolio and climate solution investments targets, together with mandatory engagement targets.

With the addition of new members, a total of 79 asset owners have chosen to set sub-portfolio targets. On average, members targeted a reduction of 26 per cent by 2025 for bonds, equities, real estate, and infrastructure. These reductions are aligned with the Paris Agreement and the IPCC Sixth Assessment Report pathways for achieving net zero greenhouse gas (GHG) emissions by 2050.

The target-setting methodologies for sub-portfolio targets cover almost half, 48% or USD 4.3 trillion, of members’ total AuM. Portfolio coverage is up from 42% in the previous year, demonstrating the growing robustness of the latest and most comprehensive protocol. Sub-portfolio target coverage is expected to increase further once recently-added private assets are phased in.

Günther Thallinger, Board Member, Allianz SE, and Chair, NZAOA, said,

“The Alliance sets a powerful example for meaningful progress. To maintain momentum, governments must implement bold climate policies and define concrete sector-based and investible transition plans with short-term targets to meet their Paris commitments.”

 

UN EP FI

© UNEP