The Institutional Investors Group on Climate Change (IIGCC) has announced the launch of the Net Zero Engagement Initiative (NZEI), which aims to support investors in aligning more of their investment portfolio with the goals of the Paris Agreement.

As reported by our sister publication European Pensions, by achieving this, the IIGCC hopes the NZEI will help scale and accelerate climate-related corporate engagement.

So far, 93 investors have signed up to the initiative and 107 companies have been sent letters from investors seeking conformation that they have developed, or intend to develop, a net-zero transition plan.

Signatories include the Swedish national pension funds, BAE Systems Pension Fund, Brunel Pension Partnership, Church of England Pensions Board, France’s Fonds de Réserve pour les Retraites, Irish Life Investment Managers, Legal & General Investment Management, the Pension Protection Fund, Denmark’s Sampension, Schroders, and Universities Superannuation Scheme.

The initiative has been developed with the aim of scaling globally to cover more companies in the next 18-24 months, which is expected to provide further support to investors with aligning their portfolio overall with net zero.

In line with the Net Zero Investment Framework corporate criteria, the key transition plan recommendations set out in the letter sent to companies are: a comprehensive net-zero commitment; aligned greenhouse gas targets; tracking emissions performance; and a credible decarbonisation strategy.

To support this, the IIGCC has published Investor Expectations of Corporate Transition Plans: From A to Zero, which details the information that investors may wish to look at to assess transition plans, the rationale for these requests, and guidance on how companies can meet them.

Based on the companies’ responses, signatories will develop an engagement strategy for each company.

“The NZEI provides part of the solution to the greatest challenge facing investors who have made net-zero commitments: How to deliver on these through engagement with companies,” commented IIGCC CEO, Stephanie Pfeifer.

“By building on other initiatives, including Climate Action 100+, and by scaling up engagement, the NZEI adds to the ‘how’. In doing so, the NZEI supports investors in the implementation phase of their net-zero journey.

“We are excited about the scalability of the initiative and look forward to growing it in the coming years, both in terms of the investors involved and the number of companies covered.

“Importantly, the NZEI also shows the continued support from investors in playing their role in trying to accelerate the decarbonisation of the global economy.”

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