The UN-convened Net-Zero Asset Owner Alliance (NZAOA) recently celebrated its fifth anniversary at New York Climate Week by reporting annual emissions reductions of at least 6%, aligning with the 1.5°C pathway established by the Intergovernmental Panel on Climate Change.
This achievement underscores the Alliance’s commitment to the Paris Agreement’s goal of limiting global warming to 1.5°C, which requires a 40-60% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2050. The reductions, revealed ahead of the Alliance’s full Progress Report due in October, represent a consistent decrease in emissions over the last five years, with cumulative cuts of 31% since 2018.
The 88-member group, which manages $9.5 trillion in assets, has also set ambitious intermediate targets, with 98% of its assets under management now aligned with these goals. Investment in climate solutions has increased from 4% to 6% of total portfolios, representing $555 billion in 2024. This is a critical step as the global investment required to meet the 1.5°C target is estimated to reach $275 trillion by 2050.
In addition to sharing its progress, the Alliance issued an urgent call to policymakers for systemic changes. Key recommendations include the phasing out of coal-fired electricity, implementing equitable carbon pricing mechanisms, and creating strong regulatory frameworks to facilitate investments in net-zero solutions.
The crucial role of carbon capture and renewable energy in Europe’s transition to net zero
The Alliance highlighted the need for coordinated government action to reduce demand for oil and gas and increase alternative energy sources. These measures are seen as essential for unlocking the capital needed for a just transition to a net-zero economy.
Günther Thallinger, chair of NZAOA and board member of Allianz SE, said: “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.
“Policies in force put the world on track for global heating of 2.4°C to 2.6°C by the end of the century. 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 to 1.5°C pathways.”
The NZAOA’s fourth full progress report will be released in October, providing further insights into the collective efforts and future targets of the asset owners working towards a sustainable, low-carbon future.
