Protocol aims to strike balance between scientific ambition, active engagement and divestment constraints.
Thirty of the world’s largest investors with combined assets of US$5 trillion have released for public comment their plans for reducing carbon emissions in their portfolios over the next five years.
The United Nations-convened Net-Zero Asset Owner Alliance, members of which have committed to net zero emissions by 2050, has opened the draft ‘Alliance 2025 Target Setting Protocol’ for consultation until November 13, 2020.
The group includes Allianz, Aviva, AXA, Calpers, the Church of England Pensions Board, Generali, Munich Re, Storebrand and Zurich. It calls on members follow the scientific recommendations outlined in the Protocol and set ambitious individual targets, with the goal of achieving net-zero greenhouse gas emissions by 2050, to limit average temperature rises to 1.5°C above pre-industrial temperatures, as specified by the Intergovernmental Panel on Climate Change.
“Wherever possible the Alliance recommends members use science-based ranges, targets and methodologies, noting that data and methodological constraints persist. Members are responsible for employing recommended science-based criteria or explaining why they chose an alternative target or methodology,” the draft protocol reads.
Members will be required to publish interim targets every five years, in line with the requirements of the signatories of the Paris Agreement. Asset owners are expected to issue their own targets within 12 months of joining the Alliance, unless a reporting period is less than three months away.
The targets are set on asset owners’ Scope 3 emissions, along with encouragement to set net-zero targets on their own Scope 1 and 2 emissions. Through this process, the Alliance aims to create real world impact through engagement with corporates and policymakers, while also redirecting capital to finance the transition to net-zero.
The Alliance aims to recruit a minimum of 200 members or US$25 trillion in assets under management across the group in the medium-term.