The Net Zero Asset Owner Alliance (NZAOA) mobilizes private and institutional investors in support of the goals of the Paris Climate Accords. ¹ NZAOA is a partner of the Intentional Endowments Network (IEN), a group of university and institutional endowments that is coordinated by the Crane Institute of Sustainability (CIS). ²

NZAOA launched a Global Investor Statement to Governments on the Climate Crisis that has been signed by 532 investors that represent $39 trillion in assets and encourages increased investment by government to further their net-zero emissions goal. ³

Background

Net Zero Asset Owner Alliance was convened by the United Nations Environment Programme Finance Initiative (UNEP FI) and the Principles for Responsible Investment (PRI), at the prompting of a board member of insurance giant Allianz at the Climate Action Summit in New York, New York. ⁴ The UNEP FI was launched in 1972 to provide a global environmental agenda and advocacy. PRI is considered the leading proponent of investment that advances environmental, social and governance (ESG) principles over those of return on investment for investors as a primary measure of corporate financial performance. ^{5 6}

NZAOA’s purpose is to drive private and public financial investments in support of the environmental goals established in the Paris Accords and the United Nations Development Goals (SDG), ^{7 8 9} or net-zero greenhouse gas emissions and a temperature rise of no more than 1.5 degrees Celsius by 2050. NZAOA has 74 members and continues to grow. ¹⁰

The United Nations’ estimate of the resources required to meet this goal is $4 to $6 trillion annually, from private and governmental sources. ¹¹

NZAOA developed a three-pronged strategy that calls for engagement with companies on decarbonization, backing efforts to reduce emissions in hard to decarbonize sectors, and a call for investors and governments to invest more in renewable energy sources, green buildings, sustainable finance, and green hydrogen. ¹²

Activities

Net Zero Asset Owner Alliance publishes the targets set by its members. For example, the California Public Employees Retirement System (CalPERS) wants to reduce the carbon intensity of the bonds and equities it invests in by 27 percent by 2025, and engage on decarbonization with companies that represent 65 percent of its portfolio. ¹³

NZAOA launched the 2022 Global Investor Statement to Governments on the Climate Crisis that has now been signed by 532 investors that represent $39 trillion in assets. The statement advocates for governments to enact policies that leverage private capital in pursuit of climate goals. Signatories include CalPERS, HSBC Asset Management, Minnesota State Board of Investments, Rockefeller Asset Management, and the New York State Common Retirement Fund. ¹⁴

NZAOA sponsored an online event to support a blended finance approach of government and private finance to achieve climate goals. This approach is supported by the UN special envoy for climate action and finance and the UN high-level climate action champion. ¹⁵

Collaborations

Net Zero Asset Owner Alliance is a partner of the Intentional Endowments Network (IEN), a group of university and institutional endowments consisting of about 2,000 institutions with approximately $650 billion in endowments and $890 billion in retirement funds. IEN seeks to address issues of climate change and racial and economic equal outcomes and is coordinated by the Crane Institute of Sustainability. ^{16 17}

NZAOA works with a variety of finance climate initiatives including Climate Action 100+ (CA100) and Investor Agenda (IA). ¹⁸

CA100 is a group of 700 investors, nonprofits, and companies claiming $68 trillion in assets that are engaging companies on improving climate change governance, cutting emissions and climate related financial disclosures. The group has 166 member companies including British Petroleum, China Steel, Ford Motor, General Motors, Honda, Walmart, and Proctor and Gamble. ¹⁹

NZAOA is a founding partner of IA along with Asia Investor Group on Climate Change (AIGCC); CDP, a nonprofit that operates a disclosure system of environmental impacts of government and companies; the environmentalist nonprofit Ceres; International Green Construction Code; Institutional Investors Group on Climate Change; PRI; and UNEP FI to advocate for net-zero emissions and a temperature rise of no more than 1.5 degrees Celsius. Corporate engagement, investment, policy advocacy and investor disclosure are the main areas of work. ^{20 21 22 23}

The alliance collaborates with the Coalition of Finance Ministers for Climate Action (CFMCA) in an effort to converge financial support for the Helsinki Climate Principles. CFMCA is composed of fiscal and economic policy makers from 75 countries. ²⁴

People

Gunther Thallinger is chair and board member of Net Zero Asset Owner Alliance . He was a principal at McKinsey and Company and currently is CEO of Allianz Investment Management. Thallinger has stated that “capitalism as it cannot be continued” and that “it must be proven that it can become sustainable.” ^{25 26}

NZAOA is let by a steering group that includes Akiko Osawa, the managing executive officer of Nippon Life Insurance Company, and Anne Simpson, the interim managing investment director of the board governance and sustainability of CalPERS. ²⁷

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