NZEI was set up to build on and extend the reach of investor engagement beyond the Climate Action 100+ focus list, including more companies that are heavy users of fossil fuels, contributing to demand for its products.
The objective is to help investors align more of their portfolio with the goals of the Paris Agreement, as set out by their net zero commitments. This includes the Net Zero Asset Managers (NZAM) and Paris Aligned Asset Owners (PAAO) initiatives, which we co-convene. Under the Net Zero Investment Framework (NZIF) - the most widely utilised net zero methodology, which many signatories to these initiatives use - investors should engage, or classify as aligned, assets that account for 70% of financed emissions in material sectors.
NZEI has been established to address both points; offering a platform that supports understanding of alignment and ongoing engagement with a wider list of companies, and one that can scale as the list of target companies grows.
The central ask of investor engagement via NZEI is a corporate net zero transition plan. 107 focus companies have been sent letters from a total of 93 investors outlining their expectations for a net zero transition plan (note: not all investors signed all letters). In line with the Net Zero Investment Framework (NZIF) corporate criteria, the key transition plan recommendations set out in the letter are: 1) a comprehensive net zero commitment; 2) aligned GHG targets; 3) emissions performance tracked; and 4) credible decarbonisation strategy.
To support this request, IIGCC published Investor Expectations of Corporate Transition Plans: From A to Zero. This aims to define the key components of a credible transition plan, relevant to companies of different sizes and applicable across a range of sectors and geographies, that are consistent with the requirements of investors implementing the NZIF.