Analysis of the updated version of the Net Zero Asset Owners Alliance (NZAOA) Target Setting Protocol

Reclaim Finance critiques the updated NZAOA Target Setting Protocol for failing to align with the IEA net zero scenario, specifically regarding fossil fuel phase-out dates and the lack of rigorous engagement standards. The organization argues that the Protocol contains loopholes for coal plants under construction and lacks clear requirements for absolute emission targets and Scope 3 inclusion. Reclaim Finance recommends a full coal exit by 2030 in OECD countries and 2040 globally, an immediate end to oil and gas supply project support, and the implementation of transparent, time-bound engagement escalation policies leading to divestment.

• The NZAOA Target Setting Protocol contains loopholes that allow for continued fossil fuel expansion, specifically by permitting coal plants "under active construction" to continue and failing to include coal mining and related infrastructure in its position.
• Guidance for greenfield and brownfield projects is insufficient to prevent fossil fuel production increases; for later-stage greenfield projects, the Alliance does not recommend that members stop investing or providing debt even if the project does not align with net zero ambitions.
• The Protocol lacks a standard for effective engagement, providing no clarity on the processes or results required to trigger escalation tactics such as voting against boards or divestment, nor does it address how to defuse negative climate lobbying by investee companies.
• There are significant uncertainties regarding target scope and metrics, as Scope 3 emissions are only included "wherever possible" without a firm deadline, and the Alliance permits the use of carbon intensity targets instead of requiring absolute emissions targets.

APA

Reclaim Finance (n.d.). Analysis of the updated version of the Net Zero Asset Owners Alliance (NZAOA) Target Setting Protocol. https://reclaimfinance.org/site/wp-content/uploads/2021/10/Reclaim-Finance-recomendations-to-the-updates-of-the-NZAOA-Target-Setting-Protocol_Oct-2021.pdf

Chicago

Reclaim Finance. Analysis of the updated version of the Net Zero Asset Owners Alliance (NZAOA) Target Setting Protocol. n.d. https://reclaimfinance.org/site/wp-content/uploads/2021/10/Reclaim-Finance-recomendations-to-the-updates-of-the-NZAOA-Target-Setting-Protocol_Oct-2021.pdf.

Wikipedia

{{cite press release |author=Reclaim Finance |title=Analysis of the updated version of the Net Zero Asset Owners Alliance (NZAOA) Target Setting Protocol |url=https://reclaimfinance.org/site/wp-content/uploads/2021/10/Reclaim-Finance-recomendations-to-the-updates-of-the-NZAOA-Target-Setting-Protocol_Oct-2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{reclaimfinancendanalysis, author = {{Reclaim Finance}}, title = {{Analysis of the updated version of the Net Zero Asset Owners Alliance (NZAOA) Target Setting Protocol}}, publisher = {Reclaim Finance}, url = {https://reclaimfinance.org/site/wp-content/uploads/2021/10/Reclaim-Finance-recomendations-to-the-updates-of-the-NZAOA-Target-Setting-Protocol_Oct-2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }