Danish commercial mutual pensions giant PFA has become the latest member of the United Nation’s Net-Zero Asset Owner Alliance (NZAOA), citing the alliance’s potential to facilitate knowledge exchange as a key benefit for it as an investor.
The DKK688bn (€92.2bn) pension fund said that apart from the commitments participants in the initiative made, PFA could also use the project to swap climate investment experiences.
Kasper Ahrndt Lorenzen, PFA chief investment officer, said: “In some areas, climate-friendly investment is an immature area, and data quality, for example, can be a challenge.
“By working together as some of the world’s largest investors, we can jointly find better solutions to those problems than if we work individually,” he added.
NZAOA members pledge to lower greenhouse gas (GHG) emissions in their investment portfolios to net-zero by 2050, to align with the Paris Agreement aim of limiting global warming to 1.5°C above pre-industrial levels.
In addition to this, PFA said by signing up it had to set five-year targets outlining its projected progression towards this goal.
The alliance said the addition of PFA as its 23rd member brought the initiative’s total assets under management to over $4.6trn (€4.25trn).
Alan Polack, PFA’s group chief executive officer, said: “With more than 1.3 million clients, PFA has a special obligation to contribute to sustainable development of our society.
“We are proud to be part of the Net-Zero Asset Owner Alliance, and we will actively contribute to the cooperation between asset owners to make the alliance stronger and its impact bigger,” he added.
At the end of April, the NZAOA put out a “call for comment”, expressing the need for a robust carbon-neutrality measurement methodology, in the absence of any existing initiative fulfilling all the group’s needs.
The set of requirements laid out by members was “demanding”, the alliance said, but seen as a roadmap for future progress rather than a set of criteria any one provider would satisfy.
In March, the French civil servant pension fund ERAFP (Établissement de retraite additionnelle de la fonction publique) and Germany’s sovereign wealth fund KENFO also joined the alliance, becoming its 20th and 21st asset owner members.
The 22nd member to join was US pension fund Wespath Benefits and Investments, a non-profit agency of the United Methodist Church, Glenview, Illinois.