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Consultation on the PAII draft Net Zero Investment Framework

Introduction

The Paris Aligned Investment Initiative

In 2019, IIGCC established the Paris Aligned Investment Initiative to explore how investors can align their portfolios with the goals of the Paris Agreement, and to establish a common understanding of what it means for an investment strategy to be Paris aligned.

Key definitions and concepts relating to the alignment of investment strategies to the Paris Agreement were agreed upon, including the key goal of reducing emissions in line with pathways consistent with global net zero emissions by 2050. To ensure the greatest impact on real economy carbon emissions, the PAII established that this goal should be achieved through actions to both decarbonise portfolios and increase investments in ‘climate solutions’. 

Phase I of the Paris Aligned Investment Initiative has involved the collaboration of over 70 investors representing more than $16 trillion in assets under management and the conclusions from this phase of work have been drawn together to form the Net Zero Investment Framework. 

The Net Zero Investment Framework

The Net Zero Investment Framework sets out the main components of a net zero investment strategy with recommendations on key actions and methodologies asset owners and asset managers should utilise to assess and undertake alignment of their portfolios in order to maximise their contribution to the decarbonisation of the real economy. The Framework puts forward metrics to assess investments and measure alignment and requires investors to set concrete targets at portfolio and asset level, the implementation of which should be achieved with a combination of smart capital allocation, engagement, and policy advocacy.

The Framework has been created by investors for use by asset owners to set their strategies and to be implemented by asset managers. Our intent for the Framework is to provide a basis on which a broad range of investors can define strategies, measure alignment and transition portfolios, and we have aimed to take into account the different mandates and starting points of investors to make the Framework as universal as possible. 

To learn more about the Net Zero Investment Framework and the Paris Aligned Investment Initiative, visit the IIGCC website here

If you need to download or print a copy of the consultation, you can access a word doc. version here. If you require further support, please contact Danielle Boyd.