The Institutional Investors Group on Climate Change (IIGCC) is upgrading its NZIF, named NZIF 2.0, to be more interactive and investor-led.
Mahesh Roy, the Investor Strategies Programme Director at IIGCC, envisions NZIF 2.0 as a unified platform for investors to access all tools and guidance regarding net zero investment.
NZIF 2.0 will retain its investor-led focus, adopting a consultative approach with members. IIGCC will introduce guidance for new asset classes, including derivatives and hedge funds, before the launch of NZIF 2.0. NZIF 2.0 is targeted for a mid-2024 launch, with more clarity on the timeline expected in January.
NZIF, launched in 2021, provides investors with guidelines to align their portfolios with net zero, covering multiple asset classes.
Members of IIGCC’s Paris Aligned Investment Initiative and the Net Zero Asset Managers initiative are recommended to utilise the IIGCC’s framework. The IIGCC will reassess existing asset class guidelines, especially the framework’s sovereign bond guidance.
The IIGCC has formed a working group to evaluate new data sources and alignment criteria for sovereign debt, ensuring investors receive quality data and can engage on climate finance effectively.
The IIGCC aims to introduce guidance for investors on passive and index investing, focusing on engagements with providers like Bloomberg, FTSE Russell, and MSCI.
In the future, the IIGCC will explore integrating nature-related themes and metrics into the NZIF.
IIGCC’s Investor Strategies Programme Director Mahesh Roy said, “As we have progressed with the framework, we’ve started to think about reimagining the format.” Mahesh Roy added, “How do we deliver the NZIF to members and how do we best update it?”
Roy also noted, “The first cab off the rank will be our climate solutions guidance, which will be out next month. It’s about ensuring investors can get good data, understand country pathways and engage with sovereigns on climate finance.”
He further added, “Themes like water stress, whilst not net zero-related, have a climate adaptation and resilience aspect that is ultimately related to how an asset is dealing with climate change.”
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