The Institutional Investors Group on Climate Change (IIGCC) is today launching the ‘Net Zero Investment Framework’ following a period of industry wide consultation. The framework will enable investors to maximise the contribution they make to decarbonisation of the global economy and tackling climate change.
21 asset owners, with $1.2 trillion in assets, have used publication of the Framework to commit to achieve net zero alignment by 2050 or sooner. The funds, including the Church of England Pensions Board, are drawing on the Framework to deliver these commitments, alongside a number of asset managers who are already working with clients on net zero alignment.
The Framework enables investors to decarbonise investment portfolios and increase investment in climate solutions, in a way that is consistent with and contributes to a 1.5°C net zero emissions future. Investors do this by developing a ‘net zero investment strategy’ built around five core components of the Framework. These key components are: objectives and targets, strategic asset allocation and asset class alignment, alongside policy advocacy and, investor engagement activity and governance.
Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board and Co-Chair, IIGCC, Paris Aligned Investor Initiative (PAII), said:
“It is easy to make a long-term commitment to be net zero, but the key question is the path you take to achieve it. We have jointly chaired this process to pool the expertise and wisdom of the asset owner and fund manager community to create a framework that is both practical and credible and gets you to net zero. This is a vital part of the investment architecture that was missing. As a fund we are committed to using this Net Zero Investment Framework and are delighted to make the Asset Owner commitment today.”