ABP among latest to join IIGCC’s Paris-aligned asset owners group

The initiative is also working to broaden the scope of strategies and asset classes covered by its Net Zero framework

Europe’s largest public sector pension fund, ABP, along with the National Trust, the Church of Sweden, and the South Yorkshire Pension Fund are among the six new investors to sign the Paris Aligned Investment Initiative’s Net Zero Asset Owner Commitment.

Established in May 2019 by the Institutional Investors Group on Climate Change (IIGCC), the initiative aims to enable investors to align their portfolios and activities to the goals of the Paris Agreement. 

With these latest signatories, which also include Wiltshire Pension Fund and TPT Retirement Solutions, the asset owner group now stands at 28 investors with a combined AUM of $1.9tn. Earlier signatories include Nest, PKA, Scottish Widows, and AP2.

Through the Commitment, the pension funds will seek to decarbonise their investment portfolios by 2050 or sooner and increase investment in climate solutions, in line with a 1.5°C Net Zero emissions future. They will also need to set interim targets for decarbonisation and investment, and undertake policy advocacy, engagement, as well as voting in line with Net Zero goals.

To meet their commitments, the signatories will use the Net Zero Investment Framework, which is used by both asset owners and managers, and was developed by the IIGCC.

The initiative has also launched a work stream to define Net Zero alignment for derivatives as an asset class and broadening the scope of strategies and asset classes covered by the framework. 

The announcement comes less than a fortnight after a number of big names joined the UN’s  Net-Zero Asset Owner Alliance, which requires members commit to reaching Net Zero by 2050, establishing and reporting against interim targets every five years. 

Bayerische Versorgungskammer (BVK), one of Germany largest pension funds, was one of the five new members, alongside savings and retirement business, Phoenix Group, and the UK’s largest life insurer, L&G Group. UK-based pension insurance specialist Rothesay and Africa-focused insurer Prudential also joined. 

There are now 42 asset owners backing the Alliance, with $6.6tn under management. 

In May the IIGCC was amongst the responsible investment bodies to unveil the ‘Investor Climate Action Plans Expectations Ladder and Guidance’ – shortened to ICAPs – to help investors steer their portfolios to Net Zero by 2050.