Climate review: 12 other asset owners sign IIGCC net zero commitment | New

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Twelve other asset owners have pledged to move to net zero emissions portfolios by 2050, using a framework developed under the auspices of the Institutional Investors Group on Climate Change (IIGCC).

The new signatories of the Paris Aligned Investment Initiative (PAII) Net-Zero Asset Owner Commitment are Hesta, London Pensions Fund Authority (LPFA), Railpen, Tesco Pension Investment, AP Pension, AP3, AP7, the Church Pension Fund, Elo Mutual Pension Compagnie insurance, Ilmarinen, Lægernes Pension and PenSam.

The Paris-Aligned Asset Owners group maintained by the IIGCC now has 40 members, after the membership of ABP and five others in June.

Chresten Dengsøe, CEO of Lægernes Pension, said becoming a signatory was “a natural next step in reaching our goal of a net zero portfolio by 2050 or sooner.”

Robert Branagh, CEO of LPFA, said that together with its delegated asset manager, Local Pensions Partnerships Investments (LPPI), LPFA will develop its net zero action plan over the next 12 months. LPPI today announced its own net zero commitment.

Asset owners who commit to the IIAP will use the initiative’s net zero investment framework as a template to align their portfolios with a net zero emissions future of 1.5 ° C.

The framework currently covers four asset classes, with work on other asset classes underway. Adoption of the framework may indicate a new or strengthened commitment to net zero.

Ruston Smith, chairman of the Tesco plc pension plan, said becoming a signatory to the PAII’s net zero asset owner commitment was “a clear indication” of the plan’s goal of dealing with financial risk and risks. opportunities represented by climate change, “including through investing in sustainable businesses to support a greener world”.

Smith was one of more than a dozen UK pension administrator chairmen to issue a net zero ‘statement of support’ in July.

Stephanie Pfeifer, CEO of IIGCC, said the net zero liabilities of asset owners were “incredibly important and the first step on the path for investors to implement a net zero investment strategy.”

“We look forward to working with these asset owners on their net zero strategies and would love to see other climate-conscious asset owners consider becoming signatories to the Paris Aligned Asset Owners Pledge. “

Pension funds request zero net accounting information

Asset owners including AP2, the Environment Agency’s Pension Fund, P + and nine other institutional investors wrote to Alok Sharma, the British politician serving as COP26 chairman, requesting their support for a call on governments to set a timetable for a mandatory net zero. accounting.

Their letter, which builds on correspondence with Sharma in March, also calls for auditors to be required to ensure that they call companies that do not produce accounts taking into account the global transition to a 1 lane, 5 ° C.

The letter refers Sharma to a position paper outlining the call from global investors for zero-aligned net bookkeeping and research showing that the vast majority of companies make little or no reference to climate-related issues in their financial statements.

The signatory investors write that “if we choose to wait for companies to respond to investor pressure, it could take years to provide the numbers we need to invest in a way aligned with the Paris targets.”

Natasha Landell-Mills, head of stewardship at Sarasin & Partners, a strong advocate of net zero accounting, said companies’ financials need to be aligned on a 1.5 ° C path to answer the call of the Paris Agreement for “financial flows compatible with the pathways towards (…) climate-resilient development”.

She said based on current scientific knowledge, this meant that corporate accounts should consider the global transition to net greenhouse gas emissions by 2050.

“Likewise, for governments that have pledged to achieve net zero emissions by 2050, net zero-aligned accounting is a critical policy lever without which efforts to reorient private capital flows will be severely hampered. “

Investors invited Sharma to share her reactions to their letter and to the position paper.

Sovereign Asset Owners’ Bond Project Takes Next Stage

The organizers of an investor project focused on analyzing governance and government performance on climate change announced the formation of an advisory group and a Latin American member of the steering committee.

Aktia Bank, Amundi, Colchester Global Investors, Franklin Templeton, MFS Investment Management, Ninety One and Wells Fargo Asset Management joined the Assessing Sovereign Climate-related Opportunities and Risk (ASCOR) project as members of an advisory committee.

SURA Asset Management, described as the largest provider of pension funds in Latin America, has joined the project steering committee.

ASCOR was created by BT Pension Scheme and the Church Of England Pensions Board with the support of organizations such as the Net-Zero Asset Owner Alliance organized by the UN and the Principles for Responsible Investment.

It aims to develop a tool allowing investors to measure, monitor and compare in a “fair and appropriate” way the governance and the current and future performances of sovereign States in terms of climate change.

“Members of our advisory board, along with SURA Asset Management, provide us with in-depth knowledge of sovereign valuation processes and, most importantly, insights and insights from all of the world’s major investment markets,” said Victoria Barron , President of ASCOR and Head of Sustainable Investment at BT Pension Scheme Management.

“They will help ensure that we develop a tool that is relevant to owners and managers of assets, of all sizes and in all markets. “

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