The UN-convened Net-Zero Asset Owner Alliance (NZAOA) has released its fourth progress report, showcasing advancements towards decarbonisation among its 88 members, who collectively manage $9.5 trillion in assets.
According to the report, the NZAOA has achieved average reductions in absolute financed greenhouse gas emissions of at least 6% annually across members’ portfolios, a rate aligned with the Intergovernmental Panel on Climate Change’s 1.5°C pathway. The Alliance’s members have used its structured Target-Setting Protocol to focus on engagement targets and, where applicable, sub-portfolio, sector, or climate solution investments targets.
This industry-led alliance continues to set the pace for climate ambition, with 81 members, representing 98% of its total assets under management, establishing Paris-aligned intermediate targets to drive the transition to net-zero emissions by 2050.
The 12 members setting targets for the first time in 2024 committed to both sub-portfolio and climate solution investments in addition to engagement targets, underlining the Alliance’s commitment to holistic decarbonisation.
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Ahead of COP29 in Baku, the Alliance is urging policymakers to take concrete actions to support the Paris Agreement. They emphasize the importance of policy in speeding up net-zero transitions and call on leaders to use available tools, like carbon pricing, to meet their Nationally Determined Contributions (NDCs).
The NZAOA report highlighted that 79 members have opted to set sub-portfolio targets covering $4.3 trillion, or 48% of the Alliance’s AUM, up from 42% last year. These targets focus on reducing emissions in bonds, equities, real estate, and infrastructure by an average of 26% by 2025. This alignment with the IPCC’s Sixth Assessment Report reinforces the Alliance’s credibility in advancing climate commitments within the financial sector.
As it adds new members and phases in private assets, the Alliance expects its sub-portfolio coverage to expand further, marking continued progress in the race towards net zero.
Günther Thallinger, board member, Allianz SE and chair, NZAOA, said: “The Alliance sets a powerful example for meaningful progress. To maintain momentum, governments must implement bold climate policies and define concrete sector-based and investible transition plans with short-term targets to meet their Paris commitments.”
