The Institutional Investors Group on Climate Change has released a framework for infrastructure investors and managers to reach net-zero carbon emissions by 2050. The guidance forms part of IIGCC’s Net Zero Investment Framework, which also has specific components for private equity, real estate, listed equity, fixed income and sovereign bonds.
The Net Zero Asset Managers initiative, formed in the run-up to COP26, uses IIGCC’s framework for its criteria and recommended pathways. IIGCC was a founding member behind NZAM. Its chief executive, Stephanie Pfeiffer, was one of New Private Markets’ 10 people who will shape sustainable private markets in 2022.
The framework sets out recommendations for fund managers, such as:
- Managers should implement the TCFD’s recommendations.
- New investments should not be considered for assets that are not aligned with a net-zero pathway.
- Managers should set nearer-term targets for closed-ended funds that end before Paris-aligned target dates (such as 2030, 2040 and 2050).
- “For debt investments, given more limited ability to influence during the holding period, the screening test should be higher.”
- Managers should implement timebound KPIs for measuring and reporting on emissions and setting decarbonisation targets.