The Institutional Investors Group on Climate Change (IIGCC) has released net zero guidance for infrastructure asset owners, taking the total number of asset classes covered by the so-called Net Zero Investment Framework (NZIF) to five.
Developed by the IIGCC, a European membership body for investor collaboration on climate change, the newly released guidance provides guidance for investors on aligning and managing infrastructure portfolios with the goal of achieving global net zero emissions by 2050 or sooner.
The guidance, which was released for consultation in June 2022, has already been used in target setting as part of the Net Zero Asset Managers (NZAM) initiative by notable infrastructure investors including DIF Capital Partners, the organisation stressed.
"Beyond these early adopters, asset owners and asset managers that are signatories to Paris Aligned Asset Owners and Net Zero Asset Managers initiatives are encouraged to utilise this methodology to meet the requirements of these net zero commitment initiatives." the IIGCC said.
The guidance includes a number of different ways for investors to set targets for their infrastructure assets, so that it is useful for both multi-asset and specialist infrastructure investors.
It includes a step-by-step approach to assessing asset alignment based on six criteria including the timeframe of aligning an asset with net zero, whether targets cover all scopes of emissions and how this will be addressed via a comprehensive decarbonisation strategy.
It also sets portfolio coverage targets and indicating how the % of AUM aligned towards the goal of net zero will increase over time.
It also includes actions to increase alignment of portfolio with net zero goals, covering engagement and stewardship which includes the recommendation that 100% of carbon-based energy and transport infrastructure assets should immediately be the subject of engagement, or management interventions.
