The Net-Zero Asset Owner Alliance has expanded its protocol to cover all private assets, including private debt funds.
The NZAOA states that its protocol now covers the majority of major asset classes across investment portfolios, and will underpin guidelines related to the target of halving members' portfolio emissions by 2030, as compared to 2019 amounts.
The 89 institutional investors that make up the NZAOA include the the California Public Employees' Retirement System, Sacramento; Church Commissioners For England, London; Nippon Life, Osaka, Japan; and AXA, Paris. Members represent a total of $9.5 trillion in assets.
The new protocol expands coverage to additional private assets such as private debt funds, directly held private debt, directly held real estate debt funds, and residential mortgage loans.
Under the latest guidance, all members are required to set the next round of five-year targets. According to the NZAOA, the alliance looks to mirror the governmental process of enhancing nationally determined contributions to reducing carbon emissions every five years, a policy first implemented as part of the 2015 Paris Agreement.
“This protocol has been approved by every NZAOA member as we continue to work towards a 1.5 degree Celsius scenario," Günther Thallinger, a board member at Allianz, Munich, Germany, and chair of the NZAOA, said in a news release. "This unanimous endorsement underscores the strong commitment of all members to implement their net-zero targets in line with sound science. But we must close the widening gap between our ambitions and the real economy, which is lagging behind science.”
Through a pilot introduced this year, the NZAOA is also looking to assess sovereign debt portfolios through a scorecard, working with the Assessing Sovereign Climate-related Opportunities and Risks database.
Last year, the The Church of England Pensions Board, London, left the NZAOA claiming “thematic overlap” with other climate alliances, while AXA left the Net-Zero Insurance Alliance, while stating that it remains “fully committed” to its sustainability targets.