Investments in climate solutions by members of the UN-convened Net-Zero Asset Owner Alliance (NZAOA) surged to $787bn in 2025, up from $555bn in 2023, highlighting growing momentum among institutional investors to finance the transition to a net-zero economy.
The figure represents approximately 8% of the Alliance members' total assets under management, according to its 2026 Progress Report.
The report highlighted a significant increase in investor participation, with the number of signatories reporting climate solutions investments rising from just 17 in 2020 to 82 in 2025. These investments support activities including renewable energy, climate adaptation, resilience, nature-based solutions, carbon removal and blended finance.
The findings demonstrated how institutional investors are increasingly translating net-zero commitments into capital allocation decisions, while seeking opportunities to support the decarbonisation of the global economy.
The report also recorded progress in reducing portfolio emissions. Carbon intensity in listed equity portfolios declined from 61 to 50 tonnes of CO₂ equivalent per million dollars invested. Corporate bond portfolio intensity also fell, from 73 to 50 tonnes, reflecting greater integration of climate considerations into investment strategies.
Progress against emissions targets has been encouraging with more than 95% of NZAOA signatories establishing targets across at least three of the Alliance's four core target categories. In addition, 88% of targets established during the first target-setting cycle, covering 2020–2025, were fully achieved.
Investor engagement with companies has also strengthened. Stewardship activities delegated through asset managers reached 103% of aggregate targets, demonstrating increased efforts to encourage companies to develop credible climate transition strategies.
The Alliance is placing greater emphasis on private markets, including private equity, infrastructure, private debt and real estate. Improving climate-related data, strengthening engagement with investment managers and developing asset-specific targets remain important priorities.
In March 2026, NZAOA introduced the fifth edition of its Target-Setting Protocol, strengthening expectations around transition planning, governance, risk management, capital allocation, policy engagement and transparent reporting.
However, the report emphasised that portfolio decarbonisation and increased climate investment alone will not deliver a net-zero economy. Greater collaboration between investors, governments and financial institutions is essential to mobilise capital, develop investable projects and expand blended-finance opportunities, particularly in emerging markets.
