Achieving net zero requires both reducing emissions and, at the same time, scaling investment in low-carbon technology, infrastructure and activities. IIGCC's resources reflect this system-wide approach: they support members tackling decarbonisation and increasing allocations to climate solutions across portfolios. Our latest climate solutions resources extend guidance to the sovereign asset class and set out how members can define, assess, and engage on corporate climate solutions.
[Dan Gardiner, Head of Transition Research at IIGCC, contributed to this piece.]
Achieving net zero requires a system-wide transformation of the global economy. Climate-economy models consistently show that, alongside reducing emissions, a significant increase in investment in low-carbon technologies, infrastructure and activities is needed. According to the IEA, keeping global temperatures in line with the Paris Agreement requires around USD 2.5 trillion of additional investment every year by 2030 in areas including power generation, grid infrastructure, building refurbishment and transport.
This dual challenge is reflected in the Net Zero Investment Framework (NZIF), which sets out two complementary objectives for investors: supporting real-economy decarbonisation and increasing investment in climate solutions that enable the transition.
Many investors already allocate capital to climate solutions either as part of their broader strategies or explicitly. However, scaling this up significantly requires climate solutions to be embedded across investment processes, stewardship activities and engagement approaches.
IIGCC’s climate solutions workstream convenes investors to share best practice, and develop portfolio-level guidance, asset-level assessment tools and engagement resources.
Scaling investment in climate solutions
Key to scaling investment is a clear and practical definition of what constitutes a climate solution. Working with members, IIGCC developed a high-level, member-backed definition, first set out in Investing in Climate Solutions: IIGCC Supplementary Guidance. Grounded in credible net zero pathways and consciously focused on high-impact activities, it remains flexible across different investment approaches:
“activities, goods or services that, according to credible pathways, need to increase substantially to enable the global economy to reach net zero”
Recognising that climate solutions sit within a broad investment landscape, IIGCC's work covers multiple asset classes, including listed equity, corporate fixed income, and renewable infrastructure. Our latest supplementary guidance extends this to sovereign instruments. Investors can use it to support public financing for climate-related infrastructure and to help shape enabling policy environments.
IIGCC's climate solutions workstream has sought to identify and address some of the most common challenges investors face in scaling climate solutions: measurement and reporting, understanding levers of influence, and integrating climate solutions into net zero investment strategies.
From reducing harm to enabling change
IIGCC's climate solutions workstream also recognises the important role of stewardship and engagement. Two additional resources, published for member consultation last week as part of IIGCC’s Engage Series, aim to support members integrating the theme of climate solutions into their engagements.
The Climate Solutions Primer helps investors identify, assess, and engage on corporate climate solutions activities. The Climate Solutions: Tool for Engagement provides practical, sector-specific questions to support dialogue with companies in five sectors:
- Energy Utilities
- Oil & Gas
- Automotive
- Steel
- Mining
A key challenge for investors is the lack of consistent and comparable information on climate solutions activities. The new resources can support investors in engaging companies on disclosure.
Beyond disclosure, the resources encourage broader conversations about climate solutions deployment. This includes how understanding the extent to which companies may be capturing transition opportunities, addressing policy barriers to scaling investment and managing any associated environmental and social impacts.
The resources recognise that supportive policy and regulatory frameworks are essential to creating the conditions for climate solutions investment to scale, making policy engagement an important complement to investor action within a system-wide approach.
Supporting investors in the next phase
Together, these resources provide practical support for members seeking to increase allocations to climate solutions in line with NZIF objectives. They enable members to identify climate solutions, assess opportunities and integrate them into investment, stewardship and engagement approaches as part of a system-wide strategy. IIGCC is inviting members and stakeholders to provide feedback on them by 30 October.
These outputs sit within a broader climate solutions workstream that continues to support implementation through member engagement, knowledge sharing and dedicated climate solutions surgeries. Over time, IIGCC’s system-wide approach will also increasingly support members in engaging on the policy and regulatory conditions needed to scale climate solutions investment.
IIGCC’s latest Engage Series offering on Climate Solutions – Primer and Tool for Engagement – is open for member feedback until Friday, October 30.