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Net-Zero Asset Owner Alliance calls for regulatory mandates on Scope 3 disclosure

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By illuminem briefings

· 2 min read


illuminem summarizes for you the essential news of the day. Read the full piece on UNEP FI or enjoy below:

🗞️ Driving the news: The UN-convened Net-Zero Asset Owner Alliance (NZAOA) has called for regulatory mandates to standardize Scope 3 emissions disclosures
Their latest report emphasizes overcoming data quality issues and inconsistent accounting, which hinder climate strategies
Scope 3 emissions, comprising three-quarters of many companies' total emissions, are a critical focus for achieving net-zero goals

🔭 The context: With regulations like the EU’s CSRD and emerging frameworks in Japan and California, there’s growing urgency for standardized Scope 3 disclosures
Barriers include data inconsistencies and double-counting risks, complicating integration into portfolios
The NZAOA paper provides a five-step action plan to improve disclosures, focus on significant emission categories, and set clear reduction targets

🌍 Why it matters for the planet: Scope 3 emissions dominate most companies’ carbon footprints, so addressing them is essential to global decarbonization efforts
Clear disclosure and reliable data enable asset owners to drive effective climate strategies, reducing emissions across entire value chains
Regulatory mandates are seen as pivotal for achieving systemic change and accountability

⏭️ What's next: The NZAOA advises asset owners to adopt the five outlined steps, focusing on engagement with high-emission sectors and investments in corporates with Scope 3 targets
Policymakers are urged to implement top-down regulations for standardized disclosures
Progress in these areas will strengthen climate action in the financial sector and beyond

💬 One quote: “Our paper highlights the need for credible and comparable Scope 3 data, or else we will not see necessary carbon reductions in the real economy,” - Udo Riese, Global Head of Sustainable Investing at Allianz Investment Management

📈 One stat: Scope 3 emissions account for approximately 75% of most companies’ total emissions.

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