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A $9.5 Trillion Climate Investor Group Releases Target-Setting Protocol for Assets in Private Equity, Debt

The Net-Zero Asset Owner Alliance, a group of big investors, is taking a big step to fight climate change by announcing a new plan to handle $9.5 trillion.

Key Impact Points:

  • The Net-Zero Asset Owner Alliance, overseeing $9.5 trillion, releases its most thorough Target-Setting Protocol, now including private assets for the first time.
  • The protocol aims to cut emissions by 50 percent by 2030 and achieve net-zero emissions by mid-century.
  • Members must establish targets to reduce greenhouse gas emissions by 40 to 60 percent by 2030 compared to 2019 levels.
  • Sovereign debt emissions assessment introduced through ASCOR database pilot to enhance understanding of climate alignment.
  • The initiative highlights the importance of engaging with fund managers and creating tailored mandates to ensure climate-compliant asset procurement.

In a significant move to address climate change, the Net-Zero Asset Owner Alliance, a coalition of major institutional investors, introduces its latest effort to steer $9.5 trillion in assets towards sustainability. The fourth edition of the Target-Setting Protocol, announced today, marks a crucial moment in the alliance’s journey, expanding its focus to include private assets and sovereign debt, while intensifying its commitment to reducing emissions.

The newly introduced Target-Setting Protocol provides hope in the fight against climate change. In a world grappling with environmental challenges, the protocol signifies a united front among 89 major institutional investors, including industry leaders like CalPERS, CDPQ, Nippon Life, and Axa. The protocol’s comprehensive approach, covering a range of private assets, heralds a shift in sustainable investment strategies, propelling the finance industry towards a greener future.

Günther Thallinger, Board Member of Allianz SE and Chair of the Alliance, emphasizes the collective determination driving this ambitious endeavor. He confirms, “The fourth and most comprehensive Target-Setting Protocol has been approved by every Alliance member, managing a total of $9.5 trillion, as we continue to work towards a 1.5°C scenario.” Thallinger’s statement captures the unwavering commitment shared by members to align their investment portfolios with the imperative of sustainable development.

One of the protocol’s groundbreaking features is its inclusion of sovereign debt emissions assessment through the Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) database pilot. This pioneering initiative seeks to shed light on the climate alignment of countries’ sovereign debt holdings, providing a comprehensive understanding of emissions implications. By bridging the gap between emissions data and real-world impact, the ASCOR framework empowers investors to make informed decisions that resonate with climate-conscious objectives.

Furthermore, the protocol emphasizes the importance of engaging with fund managers to drive emissions reduction strategies. Rather than resorting to a mass exodus from high-emitting assets, the Alliance advocates for tailored mandates and collaborative partnerships to foster the transition towards climate-compliant investments. This nuanced approach not only mitigates risks associated with the private market but also catalyzes sustainable economic growth, aligning with the broader ethos of the United Nations Sustainable Development Goals.

The Net-Zero Asset Owner Alliance is making the financial world greener by setting ambitious goals and using new methods to work towards a future with zero net emissions. This not only meets its responsibilities but also shows how finance can create positive change globally.

The Net-Zero Asset Owner Alliance offers hope and shows the way to a sustainable future in a world full of uncertainty and environmental damage, one investment at a time.

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