An alliance of the world’s largest pension funds and insurers, including one of Canada’s biggest institutional investors, has committed to carbon-neutral investment portfolios by 2050.
This commitment is part of the newly launched, United Nations-convened Net-Zero Asset Owner Alliance, which was announced today at the UN Secretary-General’s Climate Action Summit, which brought together governments, companies, and civil society to strengthen commitments and accelerate the implementation of the Paris Agreement on Climate Change.
“There are no short-cuts to decisive climate action. We need to take a long-term view.”
The Alliance was initiated by La Caisse de dépôt et placement du Québec (CDPQ), Allianz, France’s Caisse des Dépôts, Folksam Group, PensionDanmark, and Swiss Re, at the beginning of 2019. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich have joined as founding members.
“The Net-Zero Alliance is the recognition that institutional investors collectively have an important role to play in fostering the energy transition the world needs,” said Michael Sabia, CEO of CDPQ. “For investors like CDPQ, there are so many opportunities to earn commercial returns by investing in low-carbon solutions and to work with portfolio companies to decarbonize. Combined with the necessary changes in public policies, investors’ actions will induce real change in every sector.”
Eric Lombard, CEO of Caisse des Dépôts in France added that the Alliance sends “a strong signal” to portfolio companies about aligning with the Paris Agreement.
“As an institutional investor, [Caisse des Dépôts] is proud to commit to a 1.5°C roadmap today,” he said. “This ambition is strong and must be supported by a rigorous methodology, to which Caisse des Dépôts’ teams will actively contribute.”
The Net-Zero Asset Owner Alliance is an example of investors acknowledging the need to protect people and the planet with a focus on the need for companies to transform their businesses to deliver a low carbon economy.
“There are no short-cuts to decisive climate action. We need to take a long-term view,” said Inger Andersen, executive director of the UN Environment Programme. “I applaud the leadership of the investors in this Alliance. Their commitment sends a strong signal that financial markets and investors are listening to science, and moving us to a path of resilience and sustainability.”
The members of the Alliance will immediately start to engage with the companies in which they are investing to ensure they decarbonize their business models. Initiatives such as the UN Global Compact “Business Ambition for 1.5°C — Our Only Future” campaign will be a partner in mobilizing corporations to commit to net-zero emissions. The Alliance will also collaborate with other initiatives, such as the Investor Agenda, Science Based Targets initiative, Climate Action 100+, and the newly announced 2050 Ambition Alliance.
Alliance members are also actively encouraging additional asset owners to join them in their goal to decarbonize investment portfolios and achieve net-zero emissions by 2050.
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