The Net-Zero Asset Owner Alliance (NZAOA) has published guidance encouraging its members to actively support the development of effective climate policy.
The $9.5trn (€8.8trn) UN-convened group has also published a paper aimed at helping its members both develop and evaluate transition plans amid evolving guidance and standards.
The policy engagement guidelines are based on the notion that meeting individual net zero commitments will be out of reach for institutional investors unless the underlying policy environment is supportive.
“It’s critical that asset owners work to drive an enabling policy environment, without which it would be impossible for investors to fulfil their net zero commitments,” said Günther Thallinger, board member of Allianz SE and chair of the NZAOA.
“The Alliance’s new policy engagement guidelines encourage members in this regard,” he added.
The guidelines set out how a net-zero-aligned approach to public policy engagement should be accountable, active, consistent and transparent.
“Asset owners need to be active in helping to find solutions and cannot simply wait on the sidelines,” the guidelines stated.
Public policy engagement is in addition to the expectation that asset owners ensure their asset managers’ own climate policy engagement and stewardship of investees’ activities are aligned with Alliance members’ commitments.
Help for transition plan ‘dual role’
The Alliance today also published a report setting out practical steps for developing and evaluating transition plans. It showed how members are already positioned to create a transition plan, providing guidance for mapping Alliance members’ activities against five robust transition plan frameworks.
“Asset owners have a dual role, as both preparers and users of transition plans,” the paper stated. “The dual role can come with its own sets of challenges, which this paper was created to address for the benefit of the NZAOA members.”
Overall, the two outputs are intended to contribute to the credibility of the 87 Alliance members’ net zero commitment.
More specifically, they reflect recommendations set out by the UN Secretary General’s High Level Expert Group (HLEG) on the Net-Zero Emissions Commitments of Non-State Entities, a group set up to ensure the robustness of net zero pledges made by the private sector and other non-state actors.
The Alliance’s guidance on net zero public policy engagement comes after the Principles for Responsible Investment and other bodies yesterday announced the creation of a net zero policy taskforce, again a recommendation of the HLEG.
Investors and investor groups are increasingly pointing out that they cannot achieve major sustainability goals if public policy is not pulling in the same direction.
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