$5 trillion investor group sets tougher portfolio carbon targets

In this news, we discuss the $5 trillion investor group sets tougher portfolio carbon targets.

LONDON (Reuters) – Thirty of the world’s largest investors with a total of $ 5 trillion said on Tuesday they plan to set targets to reduce their portfolio’s carbon emissions by 29% over the next five years.

All of the members of the Net-Zero Asset Owner Alliance, a group that includes America’s largest pension scheme CalPERs and German insurer Allianz, aim to align their portfolios with the 2015 Paris Agreement on climate change.

The move is the most ambitious yet from the influential group, whose members hold significant stakes in many of the world’s leading companies, and comes as pressure mounts for asset owners to use their financial strength to accelerate change.

As a growing number of investors, businesses and governments pledge to achieve net zero carbon emissions by 2050, some have been criticized for failing to set the clear, short-term goals needed to ensure that the goal is achieved.

As policymakers prepare for the next round of global climate talks in Scotland next year, the group’s move is likely to pose a challenge for other leading investors who want to step up their own efforts.

The group said its members will implement reductions in greenhouse gas emissions from their portfolios of between 16% and 29%, each confirming its own particular target in the first quarter of 2021.

The plan, called the 2025 Goal Setting Protocol, is expected to help increase investment in businesses contributing to the transition to a low-carbon economy and influence both markets and government policies, the group said in a statement. communicated.

Specifically, the group said it would send a message to the thousands of investor-owned companies that “deep emission reductions are needed,” and that the group would work with boards keen to adjust their business models.

The protocol was made available for comment by the public, academics, government and business until November 13.

“Achieving net zero is not just about reducing emissions and continuing today’s business models,” said Günther Thallinger, Alliance Chairman and member of the board of directors of Allianz SE.

“There are profound changes and opportunities that will come from the net zero economy, we see new business opportunities and strong victories for those who are ready to lead,” he added.

Reporting by Simon Jessop; Editing by Kirsten Donovan

Original © Thomson Reuters

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