New net zero framework applied by major investors across £8 trillion portfolios

11 March 2021

Some of the world’s biggest investors have become the first to apply a new framework aimed at maximising their contribution to tackling climate change. 

The new Net Zero Investment Framework, published by the Institutional Investors Group on Climate Change (IIGCC), will allow investors to decarbonise investment portfolios and increase investment in climate solutions, in a way that is consistent with and contributes to the goal of the Paris Agreement to keep global warming below 1.5°C.

The framework is already being put into practical use by 37 investors, managing $8.5 Tn in assets – including both asset owners and asset managers, including Scottish Widows, Royal London, Nest AXA Investment Managers, Aberdeen Standard Investments, Legal & General Investment Management, the Church of England Pensions Board and the Environment Agency Pension Fund. 

“The global investment community has been called on to play its part in the transition to net zero – and it is answering that call,” explainsStephanie Pfeifer, CEO, Institutional Investors Group on Climate Change. “This new swathe of net zero commitments from asset owners demonstrates the growing determination from investors to make important decisions to support a net zero and resilient future.” 

“Commitments are vital, but only meaningful for the long-term when realised. The net zero transition itself requires an ongoing transition from making commitments to delivering impact. The Net Zero Investment Framework, developed with and for investors, is a blueprint for action that will enable and support investors in reaching these goals.”

Barry O’Dwyer, CEO of the Royal London Group, commented: “The IIGCC commitment reflects our view that decarbonising our portfolio alone is not enough. As institutional investors we must influence the companies we invest in to reduce their emissions and invest in the solutions that will help us realise the goals of the Paris Agreement.”

The Framework is expected to be included in the United Nation’s Race to Zero Campaign, following the completion of an independent assessment process currently underway.