World’s Leading Investors Group Set its Ambitious Carbon Emission Target

On Tuesday, October 13, 2020, a group of the globally leading investors said that it has set its bold target of carbon emission reduction in compliance with the global agreement of the 2015 Paris Agreement on Climate Change. The group, which has 30 powerful investors managing a combined $5 trillion (3.8 trillion pounds), said that it had the plan to implement a reduction of their portfolio carbon emissions by as much as 29% over the next five years.

The latest move of the investors, nevertheless, was the most ambitious target for the global carbon emission, as analysts described, yet the group could yield pressure to policymakers and exert its influence on the head of the world’s top companies to push for a desirable change in climate change issues.

These investors shared a view that the governments were not serious about their commitment towards zero carbon emissions agreement by 2050 and neglecting to set clear targets to ensure the global goal. Analysts suggested that the group’s protocol, which would be made available for experts comment from the public, academics, government, and business until November 13, could act as a leverage for governments’ more assertive policies on climate change.

Group’s Target of carbon Emission

The group represents a high-profile agency that includes all members of the Net-Zero Asset Owner Alliance, a group that includes the biggest United States (U.S.) pension scheme CalPERs and German insurer Allianz. Considering the number of stakes that the group holds in many of the world’s largest companies and their financial strength, it aimed at playing an imperative role in climate change policies and the lowering of carbon emission globally.

According to a statement by the group, its members have agreed to implement cutting of their portfolio’s greenhouse gas emissions between 16% and 29%, beginning from the next year. Meanwhile, the investors would declare their own particular target by the first quarter of 2021.

The group said in the statement, they have framed a global plan called the 2025 Target Setting Protocol, which would be the key agenda for the carbon emission for the coming years. It further added that the protocol needed support from both markets and governments; meanwhile, the protocol includes increase investment in those companies contributing to the transition to a low-carbon economy.

Adjusting Business Models

As per the statement, the group said it planned to send a message to several other companies owned by the investors, informing about the requirement of the emission cut and adjusting their business models to meet the goals. The group has decided to work along with their board members and executives of the companies for the change of their business structure and operations.

Reflecting on the need for the action, the Alliance Chair and Member of the Board of Management, Allianz SE, Gunther Thallinger said, “Reaching net-zero is not simply reducing emissions and carrying on with the business models of today.” He added, “There are profound changes and opportunities that will come from the net-zero economy, we see new business opportunities and strong wins for those who are ready to lead.”

The latest action of the group would be a grave challenge for the governments’ next meeting for climate change talks in Scotland next year. Analysts expected that the group would be representing a powerful voice for the next meeting and the policymakers would be facing challenges to listen to the group’s actions and policies.