What is the Paris Aligned Investment Initiative?
The Paris Aligned Investment Initiative (PAII) was established in May 2019 by the Institutional Investors Group on Climate Change (IIGCC) to provide a member-led forum to explore how investors can align portfolios to the goals of the Paris Agreement.
As of March 2021, the initiative has grown into a global collaboration among four regional investor networks — AIGCC (Asia), Ceres (North America), IIGCC (Europe) and IGCC (Australia/New Zealand) — to support investors worldwide in making the net zero transition.
What is the Net Zero Investment Framework?
The Net Zero Investment Framework is a practical blueprint enabling investors to decarbonise investment portfolios and increase investment in climate solutions, in a way that is consistent with and contributes to a 1.5°C net zero emissions future.
Investors do this by developing a ‘net zero investment strategy’ built around five core components of the Framework. These key components are: objectives and targets, strategic asset allocation and asset class alignment, alongside policy advocacy and, investor engagement activity and governance.
The ‘net zero investment strategy’ is also underpinned by three types of targets, as the main metrics to measure effective action7:
- Portfolio level targets for decarbonisation and investment in climate solutions
- Timebound portfolio coverage targets for companies and assets to meet net zero or aligned criteria
- Engagement coverage threshold (>70% emissions in material sectors) ensuring intensive engagement to drive the transition
How will the Paris Aligned Investment Initiative and Net Zero Investment Framework affect change?
The Net Zero Investment Framework sets out a range of best practice methodologies and actions that investors can take forward which are the key components required to accelerate the transition to net zero and achieve emissions reductions in the real economy: governance; setting targets for emissions reductions and investment in climate solutions; strategic asset allocation; engagement and stewardship; portfolio construction; corporate engagement and stewardship, policy advocacy.
These activities will have a significant impact when carried out at the scale of our members’ reach.
The Paris Aligned Investment Initiative provides a collaborative forum to develop best practice and additional methodologies and metrics for further asset classes and across wider themes relevant to Paris Alignment, to accelerate further climate action.
I have already made a net zero commitment. Can I participate in the Paris Aligned Investment Initiative?
Investors that have already set out their own net zero commitment, or are already part of an alternative pre-existing net zero commitment initiative, would still be able to use the Net Zero Investment Framework and participate in activities and working groups provided by networks under the Paris Aligned Investment Initiative to support implementation of their commitment.
If an institution is not ready to make a net zero commitment, can it participate in the Paris Aligned Investment Initiative?
Yes, the working groups and activities of the networks to support investors are open to members of the respective networks. This will include both investors who have already made commitments and those interested to develop their practices with regard to aligning to climate goals.
Is a 2050 net zero commitment soon enough?
Signatories to the Net Zero Asset Managers commitment or the Net Zero Asset Owners Commitment will be required to set interim targets for 2030 at the latest, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the IPCC special report on global warming of 1.5°C.
Is the Paris Aligned Investment Initiative part of the United Nations Race to Zero campaign?
The Paris Aligned Investment Initiative joined the Race to Zero campaign in April 2021. Investors may participate in Paris Aligned Investment Initiative activities even where they have not made a net zero commitment, but only those who have made the required commitment and take forward actions accordingly would be listed as part of Race to Zero.
Is the Paris Aligned Investment Initiative linked to the Net Zero Asset Owner Alliance?
IIGCC’s Paris Aligned Investor Initiative has been working with investors since May 2019 with the goal of supporting and enabling investors to commit to and transition to net zero. The UN-convened Net-Zero Asset Owner Alliance is a group of asset owners working in this direction, and issuing interim target-setting milestones starting in 2025. Engagement is taking place between the two initiatives with a view to further aligning approaches to achieving net-zero investment portfolios. Discussions are ongoing and detailed work is about to start.
How can I find out more information about the Paris Aligned Investment Initiative or making a net zero commitment through the Net Zero Investment Framework?
For investors, please contact:
Jane Ho, AIGCC email@example.com (Asia)
Natalie Queathem, Ceres firstname.lastname@example.org (North America)
Madeleine Hill, IGCC email@example.com (Australasia)
Danielle Boyd, IIGCC firstname.lastname@example.org (Europe)
For media enquiries, please contact:
Tom Arup, AIGCC and IGCC email@example.com (Asia and Australasia)
Sara Sciammacco, Ceres firstname.lastname@example.org (North America)
Tom Fern, IIGCC email@example.com (Europe)