Credit: iStock
Influential investor group urges governments to act 'pressingly and decisively' to provide policies in line with 1.5C warming goal
The Net-Zero Asset Owner Alliance (NZAOA) has revealed today that financed greenhouse gas emissions from its 88 members, which collectively boast $9.5tr of assets under management, have fallen by an average of six per cent year-on-year.
Marking its fifth anniversary at New York Climate Week, the UN-convened group claimed the progress made by its members was aligned with Paris Agreement-compatible goals to reach net zero emissions by 2050 and deliver 40 to 60 per cent emissions reduction by 2030 as called for by the IPCC's Sixth Assessment Report.
Released in advance of a full fourth Progress Report that is due in October, the update claims institutional investors also demonstrated long-term consistency in implementing annual carbon cuts, with 2023's financed emissions 31 per cent and 24 per cent lower than 2018 and 2019 figures, respectively.
The influential group also revealed how by August 2024, 81 of its members had reported their intermediate targets on route to transitioning their portfolios to net zero emissions by 2050, equating to a combined 98 per cent of the Alliance's total assets under management.
The group's members, which include investment giants such as Barclays, Aviva, HSBC, Lloyds, Natwest, and Standard Chartered, also collectively increased funding for climate solutions, with investment in low carbon assets increasing from four to six per cent of total investment and reaching $555bn in the last year.
"Since its launch with 12 members in September 2019, the Alliance has made significant progress, expanding to 88 institutional investors (as of 1 September 2024) across 19 countries and consistently achieving substantial emissions reductions in line with scientific targets," said Günther Thallinger, Allianz SE board member and NZAOA chair.
"To meet global climate targets however, we must work with key stakeholders to close the widening gap between our trajectory and the real economy, which still lags far behind."
As well as previewing the findings from its fourth Progress Report, the NZAOA today called on governments to undertake systemic interventions that can reduce demand for oil and gas, increase clean energy supplies, and implement appropriate and equitable carbon pricing mechanisms aligned with the goals of the Paris Agreement.
Moreover, the NZAOA urged governments to implement clearer policy frameworks, ambitious targets, and regulatory regimes as part of detailed and credible transition plans that can help overcome net zero investment barriers, and ultimately phase-out all unabated existing coal-fired electricity generation in accordance with 1.5C pathways.
"Policies in force put the world on track for global heating of 2.4C to 2.6C by the end of the century," said Thallinger. "But it's not too late. We must remember that the cost of inaction remains far higher than the investments needed for a complete transformation.
"In addition, a transformed economy will be cheaper, healthier, more stable, and more secure than what we have today. That's why we are vocal in urging governments to act pressingly and decisively to enable a policy environment conducive with 1.5C pathways."
Keep up to date with all the latest green business news by signing up to the free Daily and Weekly BusinessGreen Newsletters.
