Paris Aligned Asset Owners initiative publishes first Progress Report and initial target disclosures for a further 13 signatories

  • Inaugural Progress Report showcases innovation and best practice amongst asset owners for turning net zero commitments into action.
  • New targets mean 40 asset owners have disclosed initial targets since March 2021.
  • The Paris Aligned Asset Owners comprises 57 signatories representing over $3.3 trillion AUM.
  • Asset owners are typically pension and superannuation funds, often systemically important.

The Paris Aligned Asset Owners initiative (PAAO), an international group of asset owners committed to supporting the goal of net zero greenhouse gas emission by 2050 or sooner, has published its first Progress Report showcasing the steps asset owners are taking to reach their net zero goals.

Alongside the Progress Report, initial target disclosures have also been published for a further 13 asset owners taking the total to 40 since the initiative launched in March 2021. The latest disclosures include targets from asset owners including AP7, Lloyds Banking Group Pensions Trustees Limited and Ilmarinen.

Asset owners are typically pension and superannuation funds, and increasingly occupy a systemically crucial position in the process of aligning financial flows to net zero by 2050.

PAAO is an outcome of the Paris Aligned Investment Initiative, which was established as a collaborative investor-led forum to support investors to align their portfolios and investment activities to the goals of the Paris Agreement. Since 2021, PAAO has been a partner to the UN Climate Champion’s Race to Zero campaign and a member of the Glasgow Finance Alliance for Net Zero (GFANZ).

PAAO signatories draw on the Net Zero Investment Framework, the most widely utilised net zero methodology by financial institutions, to set targets and devise a net zero investment strategy.

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First net zero guidance for private equity for GPs and LPs launched by IIGCC

  • IIGCC has developed a new private equity component for the Net Zero Investment Framework (NZIF) first published by the Paris Aligned Investment Initiative (PAII) in March 2021
  • The comprehensive guidance – covering metrics, targets and implementation actions relevant to GPs and LPs – offers a coherent industry-wide approach to net zero
  • For the first time, the component provides a blueprint for GPs to make and implement net zero commitments and allows LPs to incorporate private equity in net zero strategies for multi-asset class portfolios

The Institutional Investors Group on Climate Change (IIGCC) has today published a new component for the Paris Aligned Investment Initiative (PAII)’s Net Zero Investment Framework (NZIF), providing guidance on aligning private equity portfolios with net zero that is relevant to both GPs and LPs.

The addition of this new component is part of a strategy of continued expansion of the NZIF, following its initial launch in March 2021. The new component brings the asset classes covered to five: listed equity and corporate fixed income, sovereign bonds, real estate and private equity.

The NZIF is used by signatories of the Net Zero Asset Managers initiative and the Paris Aligned Asset Owners, outlining a common set of recommended actions, metrics and methodologies to maximise their contribution to achieving net zero emissions globally by 2050 or sooner.

The proposed private equity guidance is now open for public consultation here until 27 February 2022, with the final component expected to be published in Q2 2022.

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10 new investors join the Paris Aligned Asset Owners group, bringing total signatories to 50 with USD 2.8 trillion total assets

01.11.21

  • Paris Aligned Asset Owners group grows to 50 with combined assets under management of USD 2.8 trillion
  • New signatories to the initiative include three significant New York City pension funds and four New Zealand Crown investors, boosting representation from outside of Europe
  • Investors commit to achieving net zero portfolio emissions by 2050 or sooner, engaging with companies and policy makers with this target in mind, and increasing investment in climate solutions
  • Six existing signatories have also published initial net zero targets and objectives for the first time

Ahead of COP26 starting in Glasgow this week, 10 new asset owners have joined the existing 40 signatories to the Paris Aligned Investment Initiative’s Net Zero Asset Owner Commitment.

New signatories include three significant New York City pension funds – the New York City Employees’ Retirement System (NCERS), New York City Teachers’ Retirement System (TRS) and New York City Board of Education Retirement System (BERS) – along with four New Zealand Crown investors – the Accident Compensation Corporation, Government Superannuation Fund, National Provident Fund and NZ Super Fund – as well as Barclays Bank UK Retirement Fund, HSBC Bank Pension Trust and West Midlands Pension Fund in the UK. Following these latest additions, the initiative now includes 50 asset owners, collectively responsible for more than USD 2.8 trillion in assets.

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Paris Aligned Asset Owners group grows to USD 2.35 trillion with new additions from Australia and Europe

20.09.21

  • Paris Aligned Asset Owners group grows to 40 investors with combined assets under management of USD 2.35 trillion
  • New joiners to the initiative include HESTA – the first Australian signatory – as well as number of Danish pension funds, Railpen, Tesco Pension Investment and Elo Mutual Pension Insurance Company
  • Investors commit to achieving net zero portfolio emissions by 2050 or sooner, engaging with this target in mind, and increasing investments in climate solutions
  • Signatories join at the start of Climate Week NYC 2021, boosting membership of the Race to Zero campaign

12 new asset owners have joined the 28 existing signatories to the Paris Aligned Investment Initiative Net Zero Asset Owner Commitment, bringing the total signatories to the initiatives to 40. Among the new signatories include Australian industry superannuation fund HESTA, along with UK-based London Pension Funds Authority, Railpen and Tesco Pension Investment, and European asset owners AP Pension, AP3, AP7, the Church Pension Fund, Elo Mutual Pension Insurance Company, Ilmarinen, Lægernes Pension and PenSam. Following these latest additions, the initiative now includes 40 asset owners, collectively responsible for more than USD 2.35 trillion in assets.

Investors signing up as Paris Aligned Asset Owners will be joining a collaborative investor-led global forum which supports investors in aligning their portfolios and activities with the goals of the Paris Agreement. They will be committing to decarbonise their portfolios by 2050 or sooner, increase investment in climate solutions and will need to set interim targets and undertake advocacy and engagement in line with net zero goals.

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