The Institutional Investors Group on Climate Change (IIGCC) is proposing to add an infrastructure component to a net-zero investment framework for investors.
The new infrastructure component is expected to become the sixth asset class covered by the Paris Aligned Investment Initiative’s Net Zero Investment Framework (NZIF), which was launched in March 2021, and has expanded through the addition of listed equity and corporate fixed income, sovereign bonds and real estate and the recently proposed private equity asset class.
NZIF – developed under the guidance of IIGCC – is used by signatories of the Net Zero Asset Managers initiative and more than 50 Paris Aligned Asset Owners, outlining a common set of recommended actions, metrics and methodologies to maximise their contribution to achieving net-zero emissions globally by 2050 or sooner.
The infrastructure components proposed for the framework are intended to be relevant to both asset owners and asset managers, IIGCC said, adding that it has published the new component, providing guidance on aligning and managing infrastructure portfolios with the goal of achieving global net-zero emissions.
IIGCC is consulting on the infrastructure component until 8 July February, with the final component expected to be published in the third quarter of the year.
Stephanie Pfeifer, IIGCC’s CEO, said infrastructure has a “fundamental and unique role” to play in driving the transition of the global economy to net-zero thanks to the variety of real-world services it provides, including transport, energy and utilities, the long-term nature of assets and the opportunity to invest in climate solutions.
“Building on the six asset classes already covered, we aim to continue to expand the Net Zero Investment Framework in the coming year,” Pfeifer said.
Chris Newton, co-lead of IIGCC’s infrastructure working group and executive director of responsible investment at IFM Investors said: “Harnessing collaborative thinking and the perspectives of a variety of stakeholders is crucial to developing solutions for a net-zero future.
”I encourage stakeholders to look at the consultation report and provide feedback to support the further development of this framework, which aims to offer globally consistent guidance for infrastructure investors to align their portfolios to net zero.”
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