Major shareholder groups announce new Paris-aligned framework for investors

The world’s major responsible investment bodies have unveiled a framework to help investors steer their portfolios to Net Zero by 2050.

The ‘Investor Climate Action Plans Expectations Ladder and Guidance’ – shortened to ICAPs – identifies key investor actions needed across investment, corporate engagement, policy advocacy and investor disclosure. 

The project has been coordinated by the Investor Agenda – an umbrella body for the UNEP Finance Initiative, the Principles for Responsible Investment (PRI), CERES, CDP, the Institutional Investors Group on Climate Change (IIGCC), Australia and New Zealand’s Investor Group on Climate Change, and the Asia Investor Group on Climate Change.

The framework includes recommendations – such as carbon footprinting – for investors that are just beginning to think about climate risks; as well as suggestions for the leading institutions on Net Zero finance, including adopting incremental and long-term portfolio emissions reductions targets aligned with 1.5°C. 

While the Investor Agenda does not prescribe a specific method for setting emissions targets, there are a number of newly-released guidelines including the Net-Zero Asset Owner Alliance’s 2025 Target Setting Protocol and the Net Zero Investment Framework from Investor Agenda member IIGCC.

The Investor Agenda said it hopes that at least half of all major investors will issue a credible ‘climate action plan’ or adopt some of its recommendations in the next year, and that all major investors have a plan with net-zero targets in the next five years.

The release of ICAPs comes days after the International Energy Agency warned that an immediate halt to all new fossil fuel projects is required to keep global warming in check. It adds to the growing pressure for financial sector players and the broader economy to align with the Paris Agreement's more ambitious goal of limiting warming to under 1.5 °C, instead of 2°C.