The IFoA’s Net Zero and the Implications for Investment Portfolios Working Party introduces its new paper on portfolio alignment metrics
We are pleased to publish our latest paper on portfolio alignment metrics. It is the first in a series exploring different ways investments can be designed and reported on to help achieve the net zero transition. Our aim is to help actuaries improve their understanding of:
The goal of the Paris Agreement is to prevent global temperatures from rising by more than 2°C above pre-industrial levels and pursue efforts to limit it to 1.5°C above pre-industrial levels. This requires a significant reduction in global greenhouse gas emissions and achieving net zero emissions by 2050.
Portfolio alignment metrics are forward-looking metrics intended to help investors understand whether their investment portfolios are on track to meet the Paris Agreement goals. They also aim to encourage capital flows towards activities needed for a net zero transition.
Since 2020 several metrics have been put forward by industry groups and explored in technical papers. Companies and actuaries have been exploring the practicalities of these metrics and starting to incorporate them into investment reporting and design. But this has not been without key challenges.
This paper explores the following questions:
Ruth Bryson, Chair, IFoA’s Net Zero and the Implications for Investment Portfolios Working Party
