- Paris Aligned Asset Owners group grows to 50 with combined assets under management of USD 2.8 trillion
- New signatories to the initiative include three significant New York City pension funds and four New Zealand Crown investors, boosting representation from outside of Europe
- Investors commit to achieving net zero portfolio emissions by 2050 or sooner, engaging with companies and policy makers with this target in mind, and increasing investment in climate solutions
- Six existing signatories have also published initial net zero targets and objectives for the first time
Ahead of COP26 starting in Glasgow this week, 10 new asset owners have joined the existing 40 signatories to the Paris Aligned Investment Initiative’s Net Zero Asset Owner Commitment.
New signatories include three significant New York City pension funds – the New York City Employees’ Retirement System (NCERS), New York City Teachers’ Retirement System (TRS) and New York City Board of Education Retirement System (BERS) – along with four New Zealand Crown investors – the Accident Compensation Corporation, Government Superannuation Fund, National Provident Fund and NZ Super Fund – as well as Barclays Bank UK Retirement Fund, HSBC Bank Pension Trust and West Midlands Pension Fund in the UK. Following these latest additions, the initiative now includes 50 asset owners, collectively responsible for more than USD 2.8 trillion in assets.
Investors joining the Paris Aligned Asset Owners group will become part of a collaborative, investor-led global forum which supports investors in aligning with the goals of the Paris Agreement. They commit to decarbonising their portfolios by 2050 or sooner, increasing investment in climate solutions and are required to set interim targets and undertake policy advocacy and corporate engagement in line with net zero goals.
Bill de Blasio, New York City Mayor, said: “Climate change poses an existential threat to New York City, and we must do everything in our power to confront this crisis head on. In my State of the City address in January, I urged our pension funds to move to net zero greenhouse gas emissions by 2040 and to increase investments in climate change solutions to USD 50 billion by 2035. Today’s vote by the trustees will help the pension system meet these goals and ensure we have a liveable planet for future generations to come.”
Scott M. Stringer, New York City Comptroller, said: “We must act now and act boldly on climate change to protect the long-term interests of our beneficiaries, the sustainability of our pension investments and the stability and growth of the global economy. Every year, the crisis of climate change becomes more stark and immediate. Achieving net zero emissions is an imperative for investors, businesses and government to maintain economic viability as well as liveable conditions on the planet. As fiduciaries, we must mitigate the tremendous systemic risk that climate change poses to our pension funds and, to do this, we must ensure our investments support limiting global warming below 1.5 degrees Celsius. I thank the trustees for their adopting this commitment.”
Hon. Steve Maharey, Board Chair, Accident Compensation Corporation, New Zealand, said: “Following the Government announcement of new responsible investment framework for Crown Financial Institutions such as ACC, we are announcing new interim targets for both 2025 and 2030 for our investment portfolio. ACC is further committing to a 60 percent reduction in in the carbon intensity of our listed equity portfolio by 2025 compared to a 2019 baseline, and a 65% reduction by 2030. The new targets and joining of the PAII Net Zero Asset Owner Commitment are further evidence of ACC’s intent to be proactive and support a sustainable transition for New Zealanders.”
Anne Blackburn, Chair, the Government Super Fund, said: “This announcement represents a significant step forward in climate ambition and portfolio emissions reduction for the Government Super Fund. We’re pleased that the Framework, in setting out the Government’s expectation that we make steady progress towards net zero by 2050, recognises that each fund has a different objective and investment style, and preserves our operational independence.”
Dr Edward Schuck, Chair, the National Provident Fund, said: “NPF supports the Framework and is confident it can align with its ambitions while continuing to act in the financial interest of its schemes’ members. We’re looking forward to collaborating with other investors to see emissions reductions achieved in the real economy.”
Catherine Drayton, Manager of the NZ Super Fund, Chair of the Guardians of NZ Superannuation, said: “Climate change continues to present a long-term risk to investment portfolios and it is clear that commitments to achieve net zero by 2050 and align with a 1.5ºC net zero emissions future are becoming best practice for leading institutional investors. Committing the NZ Super Fund to net zero is consistent with our legislative mandate to invest the Fund in line with best practice portfolio management, our recent shift towards sustainable finance and the New Zealand Government’s commitment to the Paris Agreement.”
Mindy Lubber, CEO and President, Ceres, said: “We commend New York City for its leadership among cities in committing to net zero emissions across its pension investment portfolios by 2040, and joining other major asset owners in the Paris Aligned Investment Initiative. New York City recognizes both the risks and opportunities that the urgency of the climate crisis presents. In planning to double investments in climate solutions over the next four years to USD 8 billion, New York City’s pension funds will be realizing competitive advantages and strong returns to its beneficiaries and the people of this great city.”
Rebecca Mikula-Wright, CEO, Asian Investors Group on Climate Change (AIGCC) and Investors Group on Climate Change (IGCC), said: “The commitment of the four Crown investors is a large market signal for New Zealand and reiterates the importance of investors addressing climate risk and seizing the enormous potential returns that are being created in the net zero transition. IGCC also welcomes the New Zealand Government’s announcement of the Crown Responsible Investment Framework. Sovereign funds in all countries have an important role to play in the transition to net zero emissions and staving off the worst impacts of climate change on our communities and economies.”
In addition, six current Paris Aligned Asset Owners have disclosed their initial objectives and targets ahead of COP26, demonstrating progress towards the development and implementation of their net zero investment strategies. This comes only seven months after the first commitments were made in March 2021, with targets needing to be set within twelve months of joining the group.
Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change (IIGCC), said: “As we head into COP26, it is encouraging to see ongoing commitment from the asset owner community. We continue to see a number of investors making net zero commitments, which is very positive, but with the publication of initial targets from some of our existing signatories, we are also beginning to see these commitments be put into action. There is undoubtedly still work to do, but this is a very important step along path towards net zero.”
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Notes to editors
Full list of new signatories:
Accident Compensation Corporation (NZ), Barclays Bank UK Retirement Fund (UK), Government Superannuation Fund Authority (NZ), HSBC Bank Pension Trust (UK), National Provident Fund (NZ) New York City Board of Education System (BERS) (US), New York City Employee’s Retirement System (NYCERS) (US), New Zealand Superannuation Fund (NZ), Teachers Retirement System of the City of New York (US) and West Midlands Pension Fund (UK).
About the Paris Aligned Investment Initiative
The Paris Aligned Investment Initiative is a collaborative investor-led global forum enabling investors to align their portfolios and activities to the goals of the Paris Agreement.
The Paris Aligned Investment Initiative (PAII) was established in May 2019 by the Institutional Investors Group on Climate Change (IIGCC). As of March 2021, the initiative has grown into a global collaboration supported by four regional investor networks – AIGCC (Asia), Ceres (North America), IIGCC (Europe) and IGCC (Australasia).
118 investors representing $34 trillion in assets have engaged in the development of the Net Zero Investment Framework through the Paris Aligned Investment Initiative.