Climate Change Solutions Update

Author: Iigcc

  • Just Transition in net zero strategies: Beyond risk, towards value creation

    Integrating just transition principles into net zero strategies is crucial for enhancing portfolio resilience and reducing risk, as highlighted by the IIGCC's guidance. By treating just transition as both a risk factor and a value-creation driver, investors can better deliver their net zero goals with support from communities and stakeholders. The guidance provides practical levers and tools for integrating just transition considerations into investment strategies, helping investors manage risks, protect returns, and unlock decarbonization pathways. Three recommended action areas for investors include setting internal direction, shifting asset alignment, and influencing the external environment to contribute to resilient portfolios and credible net zero pathways. Engagement with various stakeholders is essential for shaping national transition strategies and removing barriers to scaling socially inclusive climate investments.

    https://www.iigcc.org/insights/just-transition-in-net-zero-strategies-risk-value

  • Systems Stewardship: How investors are responding to systemic risks

    The Net Zero Investment Framework emphasizes systems stewardship to address climate change, biodiversity loss, and policy fragmentation by advocating for policy changes and influencing systems, rules, norms, and policies to promote decarbonization. This approach extends beyond company-level engagement to tackle systemic risks that can impact entire markets and economies, such as the transition of hard-to-abate sectors like the steel industry towards net zero emissions. Challenges in decarbonizing steel companies can be overcome with advancements, policy support, and demand for green steel, while enablers for systems stewardship include collaboration and collective action through platforms like IIGCC. Investors are increasingly focusing on systems stewardship, as demonstrated by initiatives like the Asset Owner Statement on Climate Stewardship and Aviva Investors' holistic approach to engaging at micro and macro levels, highlighting the importance of effective policy engagement and building relationships with policymakers to drive economic growth opportunities.

    https://www.iigcc.org/insights/systems-stewardship-how-investors-are-responding-to-systemic-risk