Industry

Five Years for Major Investors to Draft Net-Zero Plans

The Investor Agenda supports asset manager and owner decarbonisation ambitions with ‘Investor Climate Action Plans’.

Investor representative groups have developed a new framework to help asset owners and managers to decarbonise their portfolios and align their investment strategies over the next five years with policy-makers’ efforts to achieve net-zero emissions globally by 2050.

The founding partners of The Investor Agenda have released tools and guidance to help institutional investors to draw up Investor Climate Action Plans (ICAPs) suitable for “wherever they may be on their climate journey”.

The new framework has been put together in recognition of the growing need for investors to put in place interim targets for their portfolios and underlying assets on the path to net-zero emissions by 2050, in line with the goals of the Paris Agreement.

The tools for developing individual ICAPs include an ‘expectations ladder’, which is structured to help investors to identify and map out the actions needed to successfully implement their climate action plans across four areas: investment, corporate engagement, policy advocacy and investor disclosure.

The expectations ladder sets out different recommended actions for investors depending on the current status, with those just beginning to think about climate characterised as Tier 4 firms, while net-zero standard-setters are Tier 1.

A statement from the Investment Agenda said institutions could choose to utilise the expectation ladder in a number of ways, from benchmarking and strengthening their own existing plans to drafting a standalone ICAP. It is hoped that at least 50% of major investors with adopt or incorporate elements of the new framework over the next 12 months, paving the way for all committing to net-zero targets within five years.

As well a document explaining the ICAPs expectation ladder, The Investor Agenda website hosts a more detailed guidance document and Q&A.

The founding partners of The Investor Agenda, which focuses accelerating investor action toward a net-zero emissions economy, are the Asia Investor Group on Climate Change, CDP, Ceres, the Investor Group on Climate Change, the Institutional Investors Group on Climate Change, the the Principles for Responsible Investment and the UN Environment Programme Finance Initiative (UNEP FI).

“We have seen tremendous growth in net-zero commitments from investors, however we need to move past commitments to concrete action and targets. UNEP FI is working with leading investors through the United Nations-Convened Net-Zero Asset Owner Alliance to cascade net-zero progress throughout the financial system and real economy, as well as with large investors who are just starting their climate action journey. The ICAPs Expectations Ladder and Guidance will help all investors take meaningful action, whether it is their first step or an additional enhancement, across sustainability, engagement and asset allocation,” said Eric Usher, Head of the UNEP Finance Initiative.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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