NZEI supports the asset-level alignment and engagement targets outlined in the Net Zero Investment Framework (NZIF), the most widely used guidance by investors who have set a net zero commitment today. It recommends that 70% of investors’ portfolio emissions are aligned or aligning with net zero by 2030, where such action is compatible with individual fiduciary duties.
Investors with a global market portfolio can cover and credibly assess alignment of up to 10%* of their portfolio emissions by joining NZEI when compared to an all-world benchmark, leveraging the power and resource efficiencies of collaborative engagement. This percentage will likely increase as the initiative grows. Investors active in Climate Action 100+ (CA100+) can cover up to about 40%* using that same benchmark.
*An indicative portfolio of 2500 companies with emissions data (CDP 2021) was created from Vanguard FTSE All-World UCITS ETF. From the 2500 companies with emissions data, 130 were CA100+ companies and 92 were NZEI. The above percentages are only for Scopes 1, 2 of these companies. In differently constructed portfolios these percentages will vary.
Asset managers and asset owners who have made an individual commitment to net zero are looking for ways to extend their engagement potential with assets. An increasing focus on value chains further highlights the importance of engagement with companies, which contribute to demand for high-emissions products.
We launched the Net Zero Engagement Initiative (NZEI) in 2023 to meet that need, offering support on investor engagement with a larger number of major emitters and their value chains.
NZEI is structured to align with other IIGCC-led or supported initiatives such as the Net Zero Asset Managers (NZAM) and Paris Aligned Asset Owners (PAAO) initiatives, and the popular supporting guidance - the Net Zero Investment Framework (NZIF).
Our goal is to help support asset managers and asset owners with their individual commitments to align portfolios with net zero by 2050, with a focus on real economy decarbonisation. NZEI is open to IIGCC members who are not signatories of any other initiative.
It aims to help members engage with, or assess as aligned, assets that account for 70% of financed emissions in material sectors, as per the Net Zero Investment Framework (NZIF) guidance.
NZEI signatories engage companies on six core asks aligned with NZIF and general climate stewardship best-practice:
The Net Zero Engagement initiative (NZEI) launched in 2023 when the initial 107 focus companies received letters from more than 90 participating investors. Today over 100 investors engage 160 companies through the initiative.
In its first year, 65% of NZEI companies have responded to the initiative’s key asks. 77% met their engagement teams at least once and 20% of engagement teams engaged at C-suite level. As the initiative grows so too do successes, with new company commitments, transition plans and disclosures published by focus companies.
Net Zero Engagement initiative (NZEI) is a voluntary, investor-led initiative open to all IIGCC members.
Participants can join engagement teams and support annual engagement letters to focus list companies.
You can find out more in our member-only NZEI website.
NZEI aims to help investors align more of their individual portfolios with the goals of the Paris Agreement, by scaling the number of companies covered by collaborative engagement. This helps to mitigate financial risk and preserve long term economic value for clients and beneficiaries. While the NZEI is structured in particular to support investors in achieving the NZIF 70% engagement targets, and objectives of the NZAM and PAAO initiatives, it is also open to signatories beyond those approaches who want to expand their engagements.
Members can find out more about current work within the corporate programme here
