Paris Aligned Asset Owners group grows to US$2.35 trillion with new additions from Australia and Europe

20 September 2021

• Paris Aligned Asset Owners group grows to 40 investors with combined assets under management of USD 2.35 trillion
• New joiners to the initiative include HESTA – the first Australian signatory – as well as number of Danish pension funds, Railpen, Tesco Pension Investment and Elo Mutual Pension Insurance Company
• Investors commit to achieving net zero portfolio emissions by 2050 or sooner, engaging with this target in mind, and increasing investments in climate solutions
• Signatories join at the start of Climate Week NYC 2021, boosting membership of the Race to Zero campaign

12 new asset owners have joined the 28 existing signatories to the Paris Aligned Investment Initiative Net Zero Asset Owner Commitment, bringing the total signatories to the initiatives to 40 asset owners, collectively responsible for more than USD 2.36 trillion in assets.

Among the new signatories include Australian industry superannuation fund HESTA, along with UK-based London Pensions Fund Authority, Railpen and Tesco Pension Investment, and European asset owners AP Pension.

Investors signing up as Paris Aligned Asset Owners will be joining a collaborative investor-led global forum which supports investors in aligning their portfolios and activities with the goals of the Paris Agreement. They will be committing to decarbonise their portfolios by 2050 or sooner, increase investment in climate solutions and will need to set interim targets and undertake advocacy and engagement in line with net zero goals.

Asset owners will be using the Net Zero Investment Framework as a blueprint for aligning their portfolios with a 1.5°C net zero emissions future. The framework supports investors in developing a net zero investment strategy built around five core components: governance and strategy, objectives and targets, strategic asset allocation, asset class alignment, policy advocacy and investor engagement. The framework currently covers four asset classes (listed equity and corporate fixed income, real estate, sovereign bonds), and work is being undertaken through the PAII to include new methodologies and approaches for assessing alignment and support the transition of infrastructure, private equity, hedge funds and derivatives.

Debby Blakey, CEO, HESTA said:We’re proud to join like-minded global investors committed to achieving net zero by 2050. Climate change represents one of the most significant challenges to the wellbeing of current and future generations. That’s why at HESTA we’re focussed on mitigating the risks of climate change across our portfolio and identifying opportunities as we transition to a low carbon economy. Our comprehensive Climate Change Transition Plan (CCTP) can help protect and enhance the long-term performance of our members’ investments, while driving meaningful change and contributing to a healthier planet and society. There is no doubt that the social, environmental and economic cost of inaction is going to be far greater than the cost of responding to climate change.

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