The Net-Zero Asset Owner Alliance members are individually committed to decarbonising their investment portfolios and financing a net-zero transition. The Alliance believes that the most effective approach is a combination of capital allocation strategies, engagement with relevant stakeholders, and field building. However, measuring the impact of these strategies on real-economy decarbonisation is not always straightforward. Still, the impact of capital allocation strategies on investment portfolio decarbonisation can be measured and disaggregated.

Aiming to identify the factors that drive the (absolute or relative) decarbonisation of an investment portfolio, the Alliance built a model portfolio to test out different methodologies to emissions attribution analysis. This discussion paper examines the different methodologies and their rationales, and explains the boundaries of the currently available emissions attribution analyses.

Irrespective of the current limitations, the Alliance puts out this discussion paper to encourage investors to establish their own emissions attribution analysis and to share knowledge on how to do so among financial institutions.