The United Nations’ Net-Zero Asset Owner Alliance is reporting that 81 of its institutional investor members, representing combined assets under management of US$9.4 trillion, have set intermediate decarbonization targets.
In its fourth progress report, the institutional investor association also reported reductions in absolute financed emissions of, on average, at least six per cent annually. The organization consists of 88 members with a combined $9.5 trillion in AUM.
Read: UN’s Net-Zero Asset Owner Alliance reflecting on five years of impact investing guidelines
The immediate targets being pursued by members representing 98.9 per cent of the alliance’s total AUM are Paris Agreement-aligned 2025 decarbonization targets. Overall, 12 new members have set environmental targets for the first time in 2024, the report noted.
A total of 79 asset owners have elected to set sub-portfolio targets, covering nearly half (48 per cent) of the alliance’s AUM. On average, members of the alliance targeted a reduction of 26 per cent by 2025 for bonds, equities, real estate and infrastructure.
In a press release, Wendy Walford, head of climate risk at Legal & General Group plc, said despite the advances seen in asset owner portfolio decarbonization, the pace of the asset energy transition in the real economy remains insufficient.
“As long-term investors, we see the difference between governments’ climate commitments and current policies as unsustainable and a decisive shift in policy is required to align policy frameworks with the net-zero transition more widely.”
Read: UN’s Net-Zero Asset Owner Alliance adopting intermediate targets