The Institutional Investors Group on Climate Change is launching a draft guide for investors seeking to align their investments with the Paris Agreement on climate change.
The framework was developed in consultation with more than 70 global investors, managing an aggregate US$16 trillion in assets. It aims to help investors actively decarbonize their portfolios with the goal of reaching net zero emissions by 2050. The group is soliciting consultations for improvements to the guide until Sept. 25, 2020.
Currently, five investors — Dutch pension fund Algemene Pensioen Groep, Brunel International, the Church of England Pensions Board, Danish pension fund PKA and Phoenix Group Holdings — are testing the framework’s impact on their portfolios. Their analyses from the trials will be folded into the guide, which currently features recommended actions, metrics and methodologies for investors to follow.
In one example, the guide outlines how investors can align assets to net zero goals within asset class portfolios. It provides practical steps to assess that alignment within sovereign bonds, listed equities, corporate fixed income and real estate and expands on how investors can transition to greater alignment over time.