Reach of Asset Owner Alliance widens beyond Europe as Asia-led members bolster membership.
The United Nations-convened Net-Zero Asset Owner Alliance (NZAOA) has expanded its membership to 42 global asset owners, pushing total assets under management (AUM) to US$6.6 trillion. The five new members represent continued strong momentum since Paris-based reinsurer SCOR joined the Alliance as the 24th member, just over a year ago.
The new members, which committed to net-zero greenhouse gas (GHG) emissions by 2050, and interim reductions every five years, collectively manage US$900 billion in AUM.
The NZAOA has strengthened its representation in Europe with the addition of UK insurance company Phoenix Group, pensions insurance specialist Rothesay, Germany-based Bayerische Versorgungskammer (BVK) and Legal & General.
“Given the urgency with which climate change is to be tackled, asset owners such as ourselves want to use their investment strategies on a worldwide scale to help limit global warming to a maximum of 1.5 °C in accordance with the Paris Climate Agreement. For us, sustainability has long been a key focus, and we will render our contribution to achieving a climate-neutral economy,” said André Heimrich, BVK CIO.
The fifth new member, Asia-led Prudential plc, expands NZAOA’s presence in global markets, alongside the addition of Japan-based Dai-ichi Life Insurance (US$379 billion AUM) back in March 2021.
“Any future climate crisis will disproportionately affect the communities we serve in Asia and Africa. As a steward of long-term capital and a protector of people’s lives, we need to use our scale and expertise to drive decarbonisation at pace – and to do so in a way which is just and fully inclusive, is engaged with our stakeholders and delivers green growth which benefits everyone. Prudential intends to play the fullest possible role in the transition to the net-zero future which is essential if global temperature rises are to be controlled,” said Prudential plc CEO Mike Wells.
By joining the Alliance, members have committed to transitioning their investment portfolios to net-zero emissions by 2050, in line with a maximum temperature rise of 1.5°C above pre-industrial levels.
In line with the group’s ‘Inaugural 2025 Target Setting Protocol’ report, each member has committed to publishing its own 2025 decarbonisation targets within an agreed 16% to 29% reduction range before COP26 in November. Commitments will involve “actively engaging” with companies in their portfolios in order to successfully manage Scope 3 emissions.
Every five years, the Alliance will be setting new decarbonisation targets, eventually reaching net-zero by 2050.
“We welcome the significant commitment this cohort of new asset owner members are making and the example they are setting. We hope they will encourage other investors to act urgently to align their investment portfolios with a 1.5°C scenario and to play their role in meeting the Paris Agreement,” said Günther Thallinger, Chair of the Net-Zero Asset Owner Alliance and Allianz board member.