The Power of Collaborative Vision:
Five Years and Nearly $10 Trillion Dollars Later on a Net-Zero Journey

In 2019, UN Secretary-General António Guterres convened a group of global insurers, large pension funds, and institutional asset owners to the Climate Ambition Summit in New York. He challenged us to start thinking about one number in particular—zero.  Specifically, he challenged us to figure out how we could transition our proprietary investment portfolios to reach net-zero in greenhouse gas (GHG) emissions by 2050, aligning our portfolios with the Paris Climate Accord targets and a maximum temperature rise of 1.5°C above pre-industrial levels. This challenge launched the Net-Zero Asset Owner Alliance (NZAOA).

Secretary-General Guterres recognized that asset owners have a unique role in the global economy and financial system. The very nature of the institutions that we represent—pension funds, insurance companies, foundations, and sovereign wealth funds—have long-term investment horizons and liabilities. Naturally, we always need to look to the future in our investment decisions. As such, we asset owners are acutely aware of the increasing disruptions that climate change is unleashing on ecosystems, societies, and economies. But we also see the many investment opportunities in the global transformation happening in the clean energy transition and in building resilience. 

This fall we celebrate the fifth anniversary of the formation of the UN-convened Net-Zero Asset Owner Alliance. We launched with twelve members. Today we have 88 members, with nearly $10 trillion in assets under management. Representing Allianz as a founding member and serving two terms as Chair has been a great honor for me. Today, I look back over these five years with pride in our accomplishments and excitement for the Alliance’s next five years. 

Back in 2019, we were prepared to pave the path forward in two phases: first by changing ourselves and then reaching out to others to join us. We knew that the NZAOA needed to show that emission reductions in investment portfolios could be achieved and demonstrate how.

In the five years since, throughout turbulent times for many climate alliances, we have seen the NZAOA thrive, growing steadily and making tangible progress toward our targets. Right from the beginning, we formulated intermediate targets for 2025, which has succeeded in getting us individually to focus on rapid implementation. Marking its fifth anniversary, the 88 members of the USD 9.5 trillion NZAOA are proud to have reduced their absolute financed GHG emissions by at least 6 % on average annually—consistent with the 1.5°C-aligned IPCC pathways.

NZAOA is also unique among net-zero alliances in that the vast majority of its members (81 of 88) have reported intermediate targets for 2030 as of August 2024, covering a combined 98% of the Alliance’s total AuM. This is essential for creating accountability and ensuring steady progress toward net-zero in line with the 1.5°C target. Moreover, members have increased investment into climate solutions—a key ambition of the Alliance—reaching $555 billion in the last year, and increasing their share of total AUM from 4% to 6% in the last three years. 

Perhaps most importantly, we have used our work to show others, including non-members, how to decarbonize their portfolios. We have detailed our progress in annual reports. We have shared our experience and knowledge by publishing guidance on policy engagement and transition planning. And most directly, we have published position papers calling for specific policy action, including on governmental carbon pricing. It is fair to say that in the world of institutional investing, the Net-Zero Asset Owner Alliance has been hailed as the gold standard for credible commitments and transparent targets.