Group of investors launches plan to achieve net zero emissions by 2050

A group of investors managing more than $16 trillion on Wednesday launched the world’s first step-by-step plan to help pension funds and others align their portfolios with the Paris Agreement on climate change, news wires reported.

Many investors have pledged high-level support to the goals of the 2015 Paris deal, but the “Net Zero Investment Framework” is the first to lay out the steps they need to take to ensure the commitment is backed up by the necessary action, Reuters noted. Specific targets could include increasing the percentage of assets invested in low-carbon passive indexes and ensuring the leaders of investee companies link pay to climate-related targets.

Since the Paris deal was struck in 2015, investors have launched a number of initiatives to help them better manage climate-related risks.

While many were useful, the Institutional Investors Group on Climate Change (IIGCC) said its framework was the first to give investors practical guidance on how to both decarbonise portfolios and boost investments in solutions to climate change.

Developed with input from 70 global investors, including bond giant PIMCO and Dutch pension investor APG, the plan sets concrete targets at the portfolio and asset class level and also addresses asset allocation, engagement and lobbying. “Countries, cities and companies around the globe are committing to achieve the goal of net zero emissions and investors need to show similar leadership,” IIGCC Chief Executive Stephanie Pfeifer said.

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