INSIGHT by Günther Thallinger, Chair of Steering Group at the UN Convened Net-Zero Asset Owner Alliance; Member of the Board of Management at Allianz
On June 12, 1941, a group of exiled representatives made a collaborative pledge in the face of geo-political crisis. The pledge became known as the Declaration of St. James Palace, which laid the foundation for the United Nations Charter signed in June 1945.
The St. James Palace Declaration proclaimed that “the only true basis of enduring peace is the willing cooperation of free peoples in a world in which, relieved of the menace of aggression, all may enjoy economic and social security.”
Today, the United Nations has become the foremost forum to address issues that transcend national boundaries and cannot be resolved by any one country acting alone. Today’s single-most pressing issue that threatens the enduring peace and security of all nations is climate change.
We believe that unity is essential in addressing climate, and the United Nations, through its UN Environmental Program Finance Initiative (UNEP FI) and the UN Framework Convention on Climate Change (UNFCCC), is the only universal platform on climate. Only through unity can the world face the enormous task of mitigating climate risks and transitioning to a healthy, resilient, and sustainable global economy in which all countries and their peoples have the opportunity to thrive.
Only through unity can the world face the enormous task of mitigating climate risks and transitioning to a healthy, resilient, and sustainable global economy in which all countries and their peoples have the opportunity to thrive.
As Chair of the UN-convened Net-Zero Asset Owner Alliance (NZAOA), I see the effectiveness of how this has allowed us to develop tools and methodologies for integrating climate impact into individual investment decision making. Leveraging the UN’s global platform, the NZAOA is a member-led initiative of institutional investors unilaterally committed to protect our environment by decarbonizing our proprietary investment portfolios by 2050 – consistent with the 2015 Paris Climate Agreement’s objective of preventing global temperature rise above 1.5°C.
Who are NZAOA members? We’re insurance companies, pension funds, foundations, and endowments, with US$11.6 trillion in our own proprietary assets. We invest our own assets, as we see fit, to meet shareholder and policyholder obligations. Together, we can go faster and farther in helping our members and beyond deliver outcomes that help more people.
As long-term oriented investors, NZAOA members are particularly well-suited to support the transformation of businesses and thus economies towards an environmentally and socially sustainable outcome. This is in the interest of our long-term investment horizons, risk/return profiles and our stakeholder obligations. Across customer groups, employees and shareholders/owners, stakeholder survey data shows that the overwhelming majority want financial institutions and asset owners to actively work on climate impact reduction – both mitigation and adaptation.
NZAOA members are acting on this feedback. Each member develops its own portfolio decarbonization targets alone and independently and, even more importantly, NZAOA asset owners share expertise to help other standard setters. We publish reports that assist other organizations and governments in preparing for long-term climate mitigation and resiliency. NZAOA members have established a reputation for being world-leading in applying science-based climate and decarbonization data into investment strategies, raising the standards and expectations for the role of the financial sector in building an inclusive and sustainable future.
Each member develops its own portfolio decarbonization targets alone and independently and, even more importantly, NZAOA asset owners share expertise to help other standard setters.
Through the United Nations multilateral platform, NZAOA members are advancing investment decision-making processes needed to fully integrate climate impact. Together, we can move faster to develop the necessary basics (measurement, data, analysis, and target-setting approaches). We are proud to be convened by the United Nations. It allows us to multiply positive outcomes in communities around the world. Our investments create skilled, well-paying jobs in renewable energy infrastructure, improve air quality by reducing harmful polluting emissions, and lower the cost of living for households by making basic needs like clean energy and transportation more affordable and accessible.
Our ability to work together is because those exiled diplomats stood together 82 years ago in St. James Palace, united in crisis and determined to secure peace. Their unity created a platform that stands today helping scientists, assets owners, investors, policymakers, and the entire global community protect our environment so that we can all enjoy peace through long-term social and economic security.
I invite you to read more about the NZAOA and our latest news here. I hope this inspires you to join us in these efforts. Together, we can go faster and farther in building a better, cleaner future for more people.
The UN-convened Net Zero Asset Owner Alliance (NZAOA) is a member-led initiative of institutional investors committed to transitioning their investment portfolios to net-zero GHG emissions by 2050 – consistent with a maximum temperature rise of 1.5°C. The Alliance members are the finance industry’s first to set intermediate targets, which include CO2 reduction ranges for 2025 (22 – 32%) and for 2030 (40% – 60%).
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.