The Paris Aligned Investment Initiative (PAII) has added new resources to its widely-used Net Zero Investment Framework (NZIF) to help asset owners and managers integrate ‘just transition’ factors into their net zero strategies.
New guidance has been published as a supplement to NZIF, which is used by members of the Paris Aligned Asset Owners group and the Net Zero Asset Managers Initiative to set net zero targets and transition plans.
The adoption of just transition principles is increasingly recognised as essential for delivering effective net zero strategies by corporates and investors, because they address the societal impacts of whole-economy decarbonisation. Specifically, these cover workforce and consumer impacts, community resilience, and place‑based planning to ensure the shift to a low‑carbon economy is fair and inclusive.
For investors, incorporating just transition considerations into their net zero strategies helps to manage material risks and protecting long‑term value, by reducing exposure to policy pushback, project delays, litigation risk, and social‑licence concerns. It can also help identify opportunities for long‑term value creation.
The supplementary guidance provides practical direction for investors looking to embed just transition considerations into their individual net zero strategies, in a fashion consistent with fiduciary duties and institutional mandates. It builds on existing guidance in NZIF 2.0, released June 2024, and will support investors “seeking to go further” by addressing data gaps, offering tools and helping them embed just transition more comprehensively across strategies and asset classes.
The guidance is accompanied by a collection of real‑world case studies showing how investors are already putting these principles into practice. The report is organised around three broad areas of action – setting internal direction and portfolio structure, shifting alignment of assets to meet targets, and influencing the external environment – that map to the NZIF 2.0 framework and includes nine investor case studies.
The PAII was created and is supported by the Institutional Investor Group on Climate Change and partner organisations.
