An alliance of the world’s largest pension funds and insurers responsible for more than US$2.4 trillion in investments is committing to carbon-neutral investment portfolios by 2050.
The commitment was launched by the newly formed, United Nations-convened Net-Zero Asset Owner Alliance. It was introduced at the UN Climate Action Summit to strengthen commitments and accelerate the implementation of the Paris Agreement on Climate Change, noted a press release.
The alliance’s founding members include the Caisse de dépôt et placement du Québec, the California Public Employees’ Retirement System and PensionDanmark.
“The Net-Zero Alliance is the recognition that institutional investors collectively have an important role to play in fostering the energy transition the world needs,” said Michael Sabia, chief executive officer of the Caisse. “For investors like CDPQ, there are so many opportunities to earn commercial returns by investing in low-carbon solutions and to work with portfolio companies to decarbonize. Combined with the necessary changes in public policies, investors’ actions will induce real change in every sector.”
Inger Andersen, executive director of the United Nations Environment Programme, said there are no short-cuts to decisive climate action. “We need to take a long-term view. I applaud the leadership of the investors in this alliance. Their commitment sends a strong signal that financial markets and investors are listening to science, and moving us to a path of resilience and sustainability.”
According to the release, the alliance’s members will immediately engage with companies they invest in to ensure they decarbonize their business models. The members will hold themselves publicly accountable on progress by setting and reporting on intermediate targets in line with the Paris Agreement.