Davos, 22 January 2019

Four months after 12 of the world’s largest pension funds and insurers committed to decarbonize their investments by 2050, the United Nations-convened Net-Zero Asset Owner Alliance has added the Church of England’s three national investment bodies and Italian insurance group Generali. The new additions bring the total assets managed by Alliance members to over US$4.3 trillion.

The 18-strong Alliance has finalized its governance and objectives for 2020 and will focus on three core areas: advancing its measurement and public reporting; engaging with portfolio companies on a net-zero target; and engaging policymakers towards policies supportive of net-zero economy ambitions. It begins this journey at Davos by engaging over 50 C-suite representatives of portfolio companies in a closed-door session.

The group of 18 pension funds and insurers are committed to decarbonize their portfolios to net-zero emissions by 2050 to avoid a global temperature increase above the 1.5°C Paris target. This will not be attained through divestment, but rather the Alliance will work closely with portfolio companies to change their business models, adopting climate friendly practices and ideally setting a net-zero target based on what science tells us is necessary in order to strive for a 1.5°C world.

Eric Usher, Head of UNEP FI, said: “We welcome the Church of England national investment bodies and Generali to the Asset Owner Alliance. All members are showing an extremely high level of commitment to portfolio decarbonization, as they hold themselves accountable on progress by setting and publicly reporting on intermediate targets in line with the Paris Agreement.”

Fiona Reynolds, CEO of the Principles for Responsible Investment, said: “The UN Asset Owner Alliance is perhaps the most exciting climate initiative of the new decade, because asset owners aren’t just asking companies to commit to a Paris-aligned world, they are committing to action—to transition their entire portfolios to net zero by 2050 with metrics, targets and regular reporting to hold themselves accountable—thereby demonstrating real leadership.”

Tim Ryan, Group Chief Investment Officer and CEO Asset & Wealth Management, Generali said: “We are proud to be part of the Net-Zero Asset Owner Alliance. It is about walking the talk and further aligning our investment portfolio to our long-term commitments. As a financial services operator we feel the responsibility of contributing to achieving carbon neutrality by 2050.” 

Andrew Brown, CEO of the Church Commissioners for England, said: “As part of our commitment to the Paris Agreement, the Church Commissioners are pleased formally to state our commitment to transition our investment portfolio to net zero emissions by 2050. We urge all governments, investors and companies also to commit to net zero 2050 to address the climate emergency.

“Climate change is the challenge of our age. The 2020s are the decade in which we need to make decisive progress, both halting the growth in global GHG emissions and setting the world on course to achieve the goals of the Paris Agreement.” 

The Alliance will be using its collective voice at Davos to highlight the urgent climate action needed to the world’s policymakers as well. The Alliance is the most ambitious institutional investor initiative to-date. Alliance members are voluntarily holding themselves accountable for portfolios that reflect net-zero emissions by 2050 – what the science tells us is necessary to hold warming to 1.5C. It is the ambition of the Alliance that by making such a commitment, non-financial actors are enabled to increase their own ambition.

Members will ramp up engagement with the companies in which they are invested, working together with initiatives such as the UN Global Compact Business Ambition for 1.5°C, the Investor Agenda, the Science Based Targets initiative, Climate Action 100+, and the WEF Mission Possible Platform.