The United Nations’ Net-Zero Asset Owner Alliance is marking five years of encouraging institutional investors to implement science-based targets towards curbing greenhouse gas emissions in their portfolios.
The network launched with just 12 investment organizations and now counts 88 members across 19 countries. Its members’ collective assets under management have nearly quadrupled since 2019, from US$2.4 trillion to $9.5 trillion.
Brian Minns, senior managing director responsible investing at the University Pension Plan, says there’s comfort in knowing so many global asset owners are committed to the alliance’s international framework. The UPP officially joined the NZAOA in 2022.
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“[All the members] share the understanding of how big the [climate change] challenge [and] knowing that there are others who are actively trying to affect change within the industry or within real economy industries . . . is incredibly impactful to us.”
He says the UPP launched its climate action plan shortly after the investment organization’s inception and reviewed a variety of target-setting protocols before selecting the NZAOA model.
Among NZAOA member organizations, investments in climate solution opportunities increased to $555 billion in 2023, a jump from $380 billion in 2022, according to a press release. The organization noted 98 per cent of its members rely on its methodology framework in investment decisions that consider climate targets.
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The NZAOA also reported the bulk of climate solution investments from members were directed toward corporate bonds and real estate, followed by listed equities and infrastructure. At the end of 2023, investments in private markets totalled $33 billion.
In 2023, 81 NZAOA member organizations with reported emissions targets reached 254 million tons of carbon dioxide equivalent, a decline from 260 million in 2022 and 277.7 million in 2021.
“Navigating such an unprecedented crisis as the climate crisis demands collaborative efforts from the finance sector and the alliance, has demonstrated that it serves as a crucial platform to facilitate that much-needed collaboration,” the organization said in the release.
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