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The road to Net Zero, a complex but key process to combat climate change
ESG investment

The road to Net Zero, a complex but key process to combat climate change

Several initiatives have been launched to achieve climate neutrality by 2050: one of them is the Asset Managers Initiative.
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18 SEPT, 2023

By Eurizon


By Federica Calvetti, ESG Coordinator at Eurizon.

Climate change has emerged as one of the most relevant challenges for the future of our planet. To mitigate its effects, in December 2015, the Paris Agreement was signed, which represents the first universal and binding pact to counteract this phenomenon. On this basis, during the 26th Conference of the Parties (COP 26) in 2021, the agreement was updated, and achieving climate neutrality (Net Zero) by mid-century officially became a priority. In parallel, the European Union has always been a pioneer in this regard and already in 2020 presented its emissions reduction strategy, committing to a 55% reduction by 2030.

The broad institutional commitment to combat climate change demonstrates the extent to which it is a priority. However, it is a complex process that requires determination in its sometimes unpopular decisions. It is estimated that in order to limit the temperature increase to 1.5°C this century (the goal of the Paris Agreement), carbon emissions into the atmosphere will have to be reduced by around 45% between 2010 and 2030, with the aim of reaching Net Zero by 2050.

In this process, our society has a significant role to play, as do the main economic players, who will play a significant role. The financial sector, in particular, has a leading role to play as it is in a privileged position to accelerate change and progress by directing more capital towards sustainable models and new technologies and by investing in companies already engaged in the transition to net zero emissions and those preparing for such a transition.

While the Paris Agreement requires governments to establish legal frameworks and take concrete measures to reduce greenhouse gas emissions, it is also important to engage in non-governmental projects that can effectively contribute to achieving sustainability goals. To this end, several initiatives have been launched to address global challenges and enable the achievement of climate neutrality by 2050: One of them is the Asset Managers Initiative (NZAMI), which was launched in December 2020.

To date, NZAMI has 315 signatories representing more than $59 trillion of assets under management, committed to supporting the Net Zero by 2050 goal and supporting investments in line with this goal. Additionally, NZAMI is committed to ensuring transparency and accountability also with respect to achieving an ambitious interim decarbonization target involving a portion of assets under management by 2030.

There is no doubt that climate change is one of the biggest challenges we face today. Therefore, we need to get involved, both individually and at the corporate level, and take concrete actions that lead to economic transformation.

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