The global economy is at a pivotal moment in the fight against climate change. Achieving emission reductions in line with the 1.5 degree towards net-zero emissions by 2050 is not an aspirational goal but a necessary commitment to mitigate the worst impacts of for people, businesses and communities.. Investors and businesses worldwide must integrate climate considerations into their decision-making processes to help transform economic sectors, so they deliver goods and services people want and need in a low carbon way. This will ensure financial resilience and long-term value creation while addressing climate risks and opportunities.
The financial sector plays a crucial role in the transition to net zero. Nearly $3 trillion is required annually by 2030 to align with the Paris Agreement’s mitigation goals. Fund managers, in particular, are in a unique position to drive decarbonisation by steering capital toward low-carbon investments, supporting portfolio companies in their transition, and setting clear net-zero targets. However, navigating the complex landscape of net-zero target-setting frameworks, particularly in emerging markets, remains a challenge.
At BII, we recognise the urgency of addressing climate change and the need for robust guidance to support investors in emerging markets. Climate change is central to our mandate of driving sustainable economic growth in the markets we invest in. Through extensive engagement with our portfolio companies and fund managers, we identified a clear gap in accessible, practical guidance tailored to emerging market contexts. Our Net zero target setting guidance is a response to that gap— providing fund managers with the tools and frameworks needed to set credible, science-aligned net-zero targets.
This guidance focuses specifically on the mitigation goal of the Paris Agreement, complementing other resources that cover climate risk, adaptation, and resilience. It provides fund managers with a structured approach to setting and implementing net-zero targets, outlining key frameworks such as the Science-Based Targets Initiative (SBTi), the Net-Zero Investment Framework (NZIF), and guidance from the Glasgow Financial Alliance for Net Zero (GFANZ). It is designed for fund managers operating in emerging markets, where regulatory and operational challenges can make net-zero alignment particularly complex.
By adopting the principles outlined in this document, fund managers can better position themselves for regulatory readiness, enhance their reputation, and attract capital aligned with climate-conscious investment strategies. More importantly, they can contribute meaningfully to the global effort to limit warming to 1.5°C and build a more sustainable, inclusive future for all.
We invite fund managers, investors, and stakeholders to engage with this guidance and take meaningful steps towards a net-zero future. The journey to net zero is one that requires collaboration, innovation, and commitment. Together, we can turn ambition into action.
