Stockholm (NordSIP) – An alliance of the world’s largest pension funds and insurers representing US$ 2.4 trillion in AUM has committed to carbon-neutral investment portfolios by 2050 in an effort to decarbonise the global economy.
The United Nations-convened network of asset owners, known as Net-Zero Asset Owner Alliance, is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).
Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and Swiss Re founded the alliance at the beginning of 2019. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich have joined as founding members.
“As investors, we have a part to play in the climate transition, together with businesses, policymakers and society,” commented Magnus Billing, CEO of Swedish occupational pension manager Alecta. “Joining the Net-Zero Asset-Owners Alliance underlines Alecta’s commitment to strengthen our portfolio’s alignment with the Paris Agreement. We aim to use our voice as owners and engage with companies to increase climate disclosure and transition, to explore new investment opportunities that align good returns and positive climate impact, and to contribute to the development of tools and methods for integration of climate in investment analysis.”
The members of the Alliance will hold themselves publicly accountable for their progress by setting and publicly reporting on intermediate targets in line with Article 4.9 of the Paris Agreement. By committing to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050, asset owners are significantly raising the bar for other investors, industry associations and, most importantly, the global economy.
“As a pension company, with customer relationships often lasting for decades, a long-term investment horizon is a natural and necessary approach for us,” added Johan Sidenmark, CEO of AMF Pension. “Integrating sustainability in our asset management –in particular risks and opportunities following climate change – is necessary if we want to fulfil our obligations not only today but also in fifty or a hundred years. Following our commitment to the Paris agreement, we want to be part of the transition towards a low-carbon economy and continuously work with alignment of our investment portfolio with the 1.5-degree target. Therefore, the goal of net-zero emission motivates us, and we look forward to being a part of this promising and timely initiative.”
The members of the Alliance will immediately start to engage with the companies in which they are investing to ensure they decarbonise their business models. Initiatives such as the UN Global Compact ‘Business Ambition for 1.5°C — Our Only Future’ campaign will be a clear partner in mobilising corporations to commit to net-zero emissions. The Alliance will also collaborate with other initiatives, such as the Investor Agenda, Science-Based Targets initiative, Climate Action 100+, and the newly announced 2050 Ambition Alliance.
“The Folksam Group has worked with responsible investments for nearly 20 years and we were part of the investor group that founded the UN PRI,” said Michael Kjeller, Executive Vice President and Head of Asset Management and Sustainability, Folksam Group. “Our good experience of collaborative engagements and the clear commitment we have signed set high expectations on the outcome of the Alliance. We believe in active ownership and that an asset owner can make a difference in the needed transition towards a 1.5 degree world. I wish that we in 2050, at the latest, can look back and see that companies have made the climate transition we have been part in pushing and encouraging them to do.”
“Our pensions, savings and investments are one of the most powerful tools we have at our disposal to address the massive challenges raised by the IPCC Reports,” added Odd Arild Grestad, CEO, Storebrand. “We can no longer overlook the impact we all can have if we move our resources towards a clean energy future. The Net-Zero Asset Owner Alliance is a great opportunity and a force for change. Sustainable investments are already generating good returns showing that a sound investment strategy is a win-win for people, planet and profit.”