Net zero guidance for infrastructure asset class launched by IIGCC
- Infrastructure intended to become the sixth asset class added to the Net Zero Investment Framework.
- The newly proposed guidance – applicable to asset owners and asset managers – covers scope, metrics and targets, and implementation actions.
- The guidance is consistent with the requirements of net zero commitments made under the Paris Aligned Asset Owners or Net Zero Asset Managers initiatives.
The Institutional Investors Group on Climate Change (IIGCC) has today published a new component for the Paris Aligned Investment Initiative (PAII)’s Net Zero Investment Framework (NZIF), providing guidance on aligning and managing infrastructure portfolios with the goal of achieving global net zero emissions by 2050 or sooner.
Since launching in March 2021, the Net Zero Investment Framework has followed a strategy of continued expansion through the addition of further asset classes. The new infrastructure component is intended to become the sixth asset class covered by the framework, with the others five as follows: listed equity and corporate fixed income, sovereign bonds, real estate and private equity.
The NZIF is used by signatories of the Net Zero Asset Managers initiative and the Paris Aligned Asset Owners, outlining a common set of recommended actions, metrics and methodologies to maximise their contribution to achieving net zero emissions globally by 2050 or sooner.
The proposed infrastructure guidance is now open for public consultation here until 8 July 2022, with the final component expected to be published in Q3 2022. The full consultation document can be viewed here.
The guidance covers a range of issues and characteristics often unique to or most pronounced within the infrastructure asset class. This includes their physical nature and direct real-world impact, the breadth of investors engaged with the asset class, the breadth of investment types and long-life cycle emissions.
Specifically, the newly proposed infrastructure guidance covers:
- Scope of infrastructure assets to be considered for measurement and management as part of a net zero strategy for infrastructure.
- Metrics and targets to measure alignment over time.
- Implementation actions to achieve alignment targets and decarbonisation in the real economy.
Stephanie Pfeifer, CEO, IIGCC, said: “Infrastructure has a fundamental and unique role to play in driving the transition of the global economy to net zero thanks to the variety of real-world services it provides, including transport, energy and utilities, the long-term nature of assets and the opportunity to invest in climate solutions. The new guidance, particularly the outlining of key actions to increase alignment of assets and a portfolio, should therefore prove valuable to all multi-asset and specialist infrastructure investors.”
“Critically, by incorporating more asset classes into net zero analysis and strategy, the greater the chance investors have of achieving real-world impact. Building on the six asset classes already covered, we aim to continue to expand the Net Zero Investment Framework in the coming year.”
Chris Newton, Co-lead of IIGCC’s infrastructure working group and Executive Director of Responsible Investment at IFM Investors said: “Harnessing collaborative thinking and the perspectives of a variety of stakeholders is crucial to developing solutions for a net zero future. I encourage stakeholders to look at the consultation report and provide feedback to support the further development of this framework, which aims to offer globally consistent guidance for infrastructure investors to align their portfolios to net zero.”
Alistair Perkins, Head of Infrastructure Debt, NN Investment Partners, said: “We welcome this Net Zero Investment Framework, which provides useful guidance and a recommended common approach to aligning and managing infrastructure portfolios towards net zero, at a time when investors’ green credentials are being increasingly scrutinised.”
The infrastructure component was developed by an IIGCC-led working group and its co-leads Alistair Perkins, NN Investment Partners and Chris Newton, IFM. The group received support from Chronos Sustainability, and several infrastructure-focused members of IIGCC and the three Paris Aligned Investment Initiative’s partner networks (AIGCC, Ceres, IGCC). Arup and GRESB also reviewed the working group’s outputs.
Find out more by registering to join a public webinar where we will present the guidance in full and provide an opportunity for members to ask questions.
– ENDS –
Notes to editors
Ross Gillam, Head of Media Relations, IIGCC
+44 (0)738 850 6013
The Institutional Investors Group on Climate Change (IIGCC) is the European membership body for investor collaboration on climate change and the voice of investors taking action for a prosperous, low carbon future. IIGCC has more than 375 members, mainly pension funds and asset managers, across 23 countries, with over €51 trillion in assets under management.
IIGCC works to support and help define the public policies, investment practices and corporate behaviours that address the long-term risks and opportunities associated with climate change. For more information visit www.iigcc.org and @iigccnews.
About the Paris Aligned Investment Initiative
The Paris Aligned Investment Initiative is a collaborative investor-led global forum enabling investors to align their portfolios and activities to the goals of the Paris Agreement.
The Paris Aligned Investment Initiative (PAII) was established in May 2019 by the Institutional Investors Group on Climate Change (IIGCC). As of March 2021, the initiative has grown into a global collaboration supported by four regional investor networks – AIGCC (Asia), Ceres (North America), IIGCC (Europe) and IGCC (Australasia).
118 investors representing $34 trillion in assets have engaged in the development of the Net Zero Investment Framework through the Paris Aligned Investment Initiative.