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$40 Trillion Investor Plan to Reach Net Zero Carbon Emissions in Portfolios

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A European group of global investment and pension fund managers totaling more than 1,200 members spread across 16 countries, controlling over $40 trillion in assets constitute the Institutional Investors Group on Climate Change or IIGCC. The IIGCC has come together to create a plan that cuts carbon emissions in their portfolios to net-zero and they hope this plan attracts other investors to do the same.

The mission of the group is to encourage capital for a worldwide transition to low carbon and to also ensure investments and markets are resilient when faced with drastic changes such as global warming. The group offers to Asset managers a set of recommended policies, actions, methods, measures, and collaborations to aid them in meeting the 2050 net-zero goal which can address climate change. The framework in question has been developed alongside over 70 funds from all over the world.

This is helped by the fact that the European Union aims to be climate neutral by 2050, this means an economy built on and powered by net-zero greenhouse gas emissions. This objective is at the core of the European Green Deal. It also falls in line with the European Union’s commitment to act against climate change as spelt out under the Paris Agreement.

Ever since the Paris Climate Agreement was signed, asset managers have fallen under increasing pressure to lower their carbon footprint. This has been spurred by their investors concentrating on sustainability and reducing the negative effects of climate change. However, due to the inability to select the most effective way forward, any real action has slowed to a crawl.

This is where IIGCC enters…

As reported in Forbes Stephanie Pfeifer, IIGCC’s Chief Executive Officer, said in a statement that cities, companies and countries all over the world were committing to achieving the net-zero emissions goal and investors had to show similar leadership.

IIGCC has created a particularly complex framework that aims to accomplish this ambitious goal. The said framework is very inclusive and contains the following aims:

  • To engage in climate and finance policy at the EU, global and statewide levels all over Europe. 
  • Providing analysis and intelligence on recent policy developments of relevance for group members.
  • Creating policy positions to make sure a cohesive investor response is presented on relevant issues.
  • Aiding to inform policy dialogue and key stakeholders’ perspectives to ensure that the policy positions of investors are properly communicated, comprehended, and reflected in legislation and final policy decisions.
  • Support members during their own engagements with policymakers.
  • Cooperative collaboration and education via workshops, guidance documents and roundtables.
  • Collaborating with similar actioned groups and working closely with European and world bodies such as the European Commission, UNFCCC, OECD, Mission 2020, and other members of the Global Investor Coalition on Climate Change.

The goal of decarbonising the world’s economy will be a major endeavour. It will require a plan that not only provides reliable and sufficient power for about 10 billion people to survive, but it will also need to cut the world’s reliance on traditional energy sources.

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