Net Zero Asset Owner Alliance (NZAOA)
Coalition of institutional investors, including major life insurers, committed to decarbonizing their investment portfolios by 2050.
The Net Zero Asset Owner Alliance brings together institutional asset owners, pension funds and life insurers, committed to net zero investment portfolios by 2050 with five-year interim targets. Unlike the NZIA which targeted underwriting liabilities, the NZAOA covers the asset side of the balance sheet, namely the investments backing technical reserves. It relies on a target-setting protocol covering financed emissions, shareholder engagement and transition financing. For a life insurer holding a large float, membership constrains asset allocation and sector selection. The distinction between assets and liabilities is essential: an insurer can decarbonize its investments while continuing to underwrite carbon-intensive risks, and vice versa, which explains why the two alliances followed different political trajectories.
Launched in September 2019 at the UN Climate Action Summit, the NZAOA binds its members; a life insurer that belongs to it must publish reduction targets for the financed emissions of its bond and equity portfolio, separate from its underwriting policy.
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