Initial adopters apply IIGC framework to $8trn of assets

England Pensions

The framework was first trialled in the second half of 2020, on portfolios totalling $1.3trn

Among the first adopters of the Institutional Investors Group on Climate Change’s (IIGC) framework are Scottish Widows, Aberdeen Standard, Brunel, Nest, Legal & General Asset Management, the Church of England Pensions Board and the Environment Agency Pension Fund. Collectively, the 35 initial adopters are applying the model to $8trn of assets.

The framework was first trialled in H2 2020, on portfolios totalling $1.3trn. It is designed to assist investors assess how and when to divest from high-emitting firms without credible decarbonisation plans; engage with firms which are developing such plans, and invest in more projects and companies providing climate solutions on way to net-zero.

To support investors to simultaneously drive progress across these approaches, the framework provides advice on developing both interim portfolio targets and interim targets for specific asset classes, to underpin longer-term net-zero goals.

The framework also assists investors to make sure that their own policy advocacy is in line with the Paris Agreement’s goals and that the companies in their portfolios are not lobbying in ways that undermine their internal climate commitments.

The first 35 firms to apply the framework are AP2, Avon Pension Fund, Brunel Pension Partnership, Bundespensionskasse AG, Church of England Pensions Board, Cornwall Pension Fund, Devon County Council, Environment Agency Pension Fund, Lloyds Banking Group Pensions Trustee Limited, National Grid UK Pension Scheme, Nest, New York State Common Retirement Fund, NN Group, Northern LGPS, Oxfordshire County Council Pension Fund, Pædagogernes Pension, PensionDanmark, PKA, Royal London, Scottish Widows and Sierra Club Foundation.

Net-zero commitments are vital, but only meaningful for the long-term when realised, the IIGC’s chief executive Stephanie Pfeiffer said.

Pfeiffer said that the net-zero transition itself requires an ongoing transition from making commitments to delivering impact. The Net Zero Investment Framework, developed with and for investors, is a blueprint for action that will enable and support investors in reaching these goals.

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