The UN-convened Net-Zero Asset Owner Alliance (NZAOA) is urging policymakers to take action on coal-fired electricity, after revealing its members have reduced emissions in line with the 1.5°C threshold.
The Alliance has launched the new call to action to encourage governments and regulators to enact measures to manage systemic risk and unlock capital for a just transition to net zero.
According to the Alliance, governments and regulators should make efforts should be made to phase out all unabated existing coal-fired electricity generation and they should also undertake systemic interventions that can deliver demand reductions for oil and gas, and also increase alternative energy supply through economy-wide action.
They’re also encouraged to design and implement appropriate and equitable carbon pricing mechanisms, aligned with their Paris Agreement commitments, and implement clear policy frameworks, strong government commitment, ambitious targets and regulatory requirements for detailed and credible transition plans that can help overcome net zero investment barriers.
Decreasing emissions
According to its own data, released in advance of the Alliance’s progress report, members have reduced annual greenhouse gas emissions by 6% in alignment with the Paris Agreement, which requires net-zero carbon emissions by 2050. Alliance members have decreased their emissions yearly, with financed emissions falling by 31% in 2023 compared to their 2018 baseline.
Ambition has also grown, according to the Alliance. Since publishing its Target-Setting Protocol, 81 members had set intermediate targets by August 2024. This comes as investments in climate solutions grew from 4% of total portfolios over the last three years to 6% this year, representing $555bn in 2024.
Günther Thallinger, board member of Allianz SE and chair of NZAOA, said: “Since its launch with 12 members in September 2019, the Alliance has made significant progress, expanding to 88 institutional investors (as of 1 September 2024) across 19 countries and consistently achieving substantial emissions reductions in line with scientific targets.
“To meet global climate targets, however, the Alliance must work with key stakeholders to close the widening gap between our trajectory and the real economy, which still lags far behind. Policies currently in force put the world on track for global heating of 2.4°C to 2.6°C by the end of the century. But it is not too late. We must remember that the cost of inaction remains far higher than the investments needed for a complete transformation.
“In addition, a transformed economy will be cheaper, healthier, more stable and more secure than what we have today. That’s why we are vocal in urging governments to act pressingly and decisively to enable a policy environment conducive to a 1.5°C pathway.”
The Alliance’s fourth Progress Report is expected to be published in October.
