Net-zero Asset Alliance session at the World Economic Forum, Davos 2020

This was the first, but certainly not the last, dialogue between the institutional investors and

asset

owners who make up the growing association of

asset

owners and privately or partially owned companies and it was a very interesting conversation. The first thing I can take away is that there is an extraordinary willingness to have that conversation because there is a fundamental understanding that neither side can effectively decarbonize at the speed and scale that we need and that it actually has to be the result of good understanding between both parties. What I understood is that there were very impressive calls for greater rigor and greater central coordination so that not every company has to invent cold water again.

It was a very optimistic recession. I am the CEO of Pension Denmark, one of the founding sponsor funds in the net

zero

acetone

alliance

half a year ago we were only six pension funds now we are more than 12 and more in, let's say, in the process, so the social assets amount to approximately 2000 billion dollars. of dollars we have already exceeded 4,000 and by the end of the year we will probably have pension funds with more than 10,000 million dollars. dollars in the Alliance, this means that in the coming years we will really see the asset owner industry advance the climate agenda and engage with the companies in which we are shareholders to help them define their business models in a more climate perspective.

I amicably drew three key takeaways from today's

session

in Davos on the UN Net Zero Asset Owner Alliance and those three takeaways revolve around the key role that asset owners must play in this transition, encouraging portfolio companies and their asset managers to transition to Net Zero. for 2050, the second key conclusion has to do with time and speed is essential, it is not just about 2050 but also the short term and the third key conclusion has to do with the sectoral transitions that are needed, this means the sectors difficult to reduce. like aviation and cement, but it means all sectors working together with asset owners.

There are three takeaways I have from the SR Owners Alliance meeting here today: Firstly, asset owners must behave as such, we must own the assets we have in our portfolios. and making sure that the people we elect to represent our interests, the chief executive, the president, know exactly what we are demanding of them from a climate change perspective. We must also ensure ourselves as owners of Sur. that our asset managers are behaving as we would like them to, so that was one of the things that we also need to help companies put together scenario plans that ensure that their businesses follow the Paris agreement and the third chance that we have as a result of this meeting. was to create at COP 26 an intergovernmental panel on climate finance, something that allows negotiators to understand what is happening in the markets and informs negotiators about how money flows and whether it is aligned with Paris or not.

There is a small clause in the Paris agreement called article 2 1 C and that Clause says that all governments have already committed to making financial flows consistent with article 2 1 a, which is about one and a half to two degrees, so a very important meeting is already in the Paris agreement. This is the first time that this group of very important investors, both insurance companies and pension funds, have met with the other two key stakeholders, one of which is the companies they own that need to influence the terms of the transition to NetZero and that is also interesting.

In the room there are some from the government side, a lot of messages about the relationship between capital flows, the roles of investors and policy makers, so this was a very important meeting that we just had of the owners of Net Zero acid, an

alliance

that is still in its infancy, but they are really taking a leadership role in helping to drive the financial sector towards the types of changes that would be required if we were to have a global transition of the economy and society to address the climate crisis. I think the key takeaways from the meeting for me was the need to pay more attention to what it means to be Net Zero and I know they're kind of stretching it, they're not recommending that the emphasis now has to be on defining that and generate appropriate metrics and not wait. for this 2050 target, but really putting strong pressure for early action.

I think what was really very well received by all the people who spoke here was that companies really expect long-term investors to join them in their long-term development, but also on the side of policymakers equally. clearly there was, I would say almost, respect in the sense that now the owners are coming forward and aligning their overall objectives with what the governments have already promised and, in terms of the goals, people also welcomed that it is not just something like Net Zero in 2050, but they understood and discussed with us, it is clear that there will be intermediate goals like 2025 and it is already very, very clear how we are going to move towards these networks here in this gradual approach, so it is a very concrete initiative that we we have here.

With a network now constantly growing between asset owners, corporations and policy makers, it was a very promising

session

. It must be said that it is very clear that we need long-term investors like Allianz Switch Three and hopefully many others to come on board to finance the big transition. towards a more sustainable

world

but also with less carbon emissions and, knowing that it is a very costly transition, funds are needed such as the money of long-term investors, who ultimately managed more than 80 billion and only through that bridge I think we can make it viable, but it is also a great opportunity.

I think it's very important that we not only talk to each other as donors, but that the company actually has to make the decision. Most importantly, it is also necessary to involve the public sector because a comprehensive debate through cooperation is urgently needed. we will agree on standards and standard means, we need to know what the reporting looks like, but we also need to know how we want to measure success and that is why the ID Acetone Alliance is very promising because they are very tangible, that is my very credible goal, which is net

zero

. by 2050