Investors Worth $5 Trillion Set Major Emissions Reduction Targets

Thirty of the world's largest investors, who together control $5 trillion in assets, have pledged to cut the greenhouse gas emissions of their portfolios by as much as 29 percent in five years.
The investors, who include Allianz, the Church of England and the California Public Employees' Retirement System, are all part of the UN convened Net-Zero Asset Owner Alliance. The group formed in 2019 with the goal of reducing the emissions of their investment portfolios to net zero by 2050 and limiting global warming to 1.5 degrees Celsius above pre-industrial levels. On the road to that goal, the group announced their 2025 Target Setting Protocol Tuesday, which includes the goal to reduce emissions across members' portfolios by 16 to 29 percent of 2019 levels by 2025.
"According to the UNEP Emissions Gap Report, every year of postponed emissions peak means that deeper and faster cuts will be required," UN Environment Programme Finance Initiative leader Eric Usher said in a press release. "The Target-Setting Protocol represents world-leading progress on the required emissions reductions from some of the biggest investors in the world."
To reach their goal, the investors will pinpoint the 20 companies most responsible for their portfolios' emissions, The Guardian explained. They will also set specific targets for highly emitting sectors like oil and gas, transport and utilities.
Some financial institutions have acted on the climate crisis by divesting entirely from certain companies or refusing to fund certain ventures. For example, Norway's largest private asset manager divested in August from companies that lobby against climate action or make more than five percent of their revenue from coal or oil sands. The Net-Zero Asset Owners Alliance, however, takes a different approach, seeking instead to engage with the companies it invests in in order to push the overall economy towards a just transition to renewable energy.
"Although decarbonization of portfolios could be easily achieved by selling carbon intensive investments, it is highly questionable if such actions alone would have a positive impact on the real economy," the group explained in the press release. "Additionally, it might undermine Alliance members ability to engage with these [companies] to effect reductions in the real economy."
Part of that engagement means encouraging companies to share regular reports on their climate actions and to craft plans to green their business, according to The Guardian. The alliance itself will also release yearly reports, and plans to grow its membership to 200 or the assets under its control to $25 trillion.
"Alliance members start out by changing themselves and then reach out to various companies to work on the change of their businesses," Alliance Chair Günther Thallinger, who serves on the board of management for Allianz SE, said in the press release. "Reaching net-zero is not simply reducing emissions and carrying on with the business models of today. There are profound changes and opportunities that will come from the net-zero economy, we see new business opportunities and strong wins for those who are ready to lead."
The alliance is part of the United Nations Framework Convention on Climate Change's (UNFCCC's) broader Race to Zero campaign, in which cities, companies and investors work to increase the number of entities that have committed to net-zero emissions by 2050 or earlier, Business Green reported. The plan is to have as many as possible commit before the next major UN climate summit, the delayed COP26.
Correction: An earlier version of this article said that Norway's largest hedge fund divested from companies that lobby against climate action. The article has been updated to identify the fund as Norway's largest private asset manager.
- Microsoft Promises to Be Carbon Negative by 2030 - EcoWatch ›
- BP to Cut Oil and Gas Production 40%, Invest 10x More in Green ... ›
- Oxford Endowment Ditches Fossil Fuels in 'Historic' Decision ... ›
- Climate Action Must Go Deeper Than 'Carbon Neutral' - EcoWatch ›
By Monir Ghaedi
As the COVID-19 pandemic continues to keep most of Europe on pause, the EU aims for a breakthrough in its space program. The continent is seeking more than just a self-sufficient space industry competitive with China and the U.S.; the industry must also fit into the European Green Deal.
European satellites continue to provide data on climate change.
EcoWatch Daily Newsletter
In 2018, a team of researchers went to West Africa's Nimba Mountains in search of one critically endangered species of bat. Along the way, they ended up discovering another.
- Eek! Bat Populations Are Shrinking. Here Are A Few Ways to Help ... ›
- First Bat Removed From U.S. Endangered Species List Helps ... ›
- What We've Lost: The Species Declared Extinct in 2020 - EcoWatch ›
Trending
President-elect Joe Biden is planning to cancel the controversial Keystone XL pipeline on the first day of his administration, a document reported by CBC on Sunday suggests.
- Construction Begins on Keystone XL Pipeline in Montana - EcoWatch ›
- Trump Approves Keystone XL Pipeline, Groups Vow 'The Fight Is ... ›
- Keystone XL Pipeline Construction to Forge Ahead During ... ›
By Jim Palardy
As 2021 dawns, people, ecosystems, and wildlife worldwide are facing a panoply of environmental issues. In an effort to help experts and policymakers determine where they might focus research, a panel of 25 scientists and practitioners — including me — from around the globe held discussions in the fall to identify emerging issues that deserve increased attention.
Ask a Scientist: What Should the Biden Administration and Congress Do to Address the Climate Crisis?
By Elliott Negin
What a difference an election makes. Thanks to the Biden-Harris victory in November, the next administration is poised to make a 180-degree turn to again address the climate crisis.
- Biden Reaffirms Commitment to Rejoining Paris Agreement ... ›
- Joe Biden Appoints Climate Crisis Team - EcoWatch ›
- Biden Plans to Fight Climate Change in a New Way - EcoWatch ›