Beyond Net Zero: How to Mobilize Passive Investing Towards Paris Alignment With a Focus on the United States

The paper introduces a framework to evaluate whether passive investment funds are aligned with the Paris Agreement, finding that none of the 35 analyzed funds fully met the criteria. The analysis reveals significant gaps in portfolio construction, particularly regarding deforestation exclusions, physical climate risks, and just transition themes. The author recommends that US asset managers, index providers, and financial regulators improve transparency and standards to ensure financial streams support a 1.5°C trajectory.

• An analysis of 35 funds showed that not a single one was fully aligned with the proposed framework's criteria.
• Passive sustainable funds frequently lack critical portfolio construction elements, including deforestation exclusions, climate governance, lobbying considerations, and physical climate risks and resilience.
• While some broad ESG and social/impact funds integrate just transition themes, no climate-focused funds do so in their portfolio construction.
• Diversified and thematic climate funds fail to incorporate exclusions for human rights violations, although 'do no harm' exclusions for tobacco and weapons are common across fund types.
• Investment stewardship policies lack transparency and clarity regarding tangible actions required for companies to align with a 1.5°C trajectory.

APA

World Resources Institute (n.d.). Beyond Net Zero: How to Mobilize Passive Investing Towards Paris Alignment With a Focus on the United States. https://www.wri.org/research/beyond-net-zero-how-mobilize-passive-investing-towards-paris-alignment-focus-united-states

Chicago

World Resources Institute. Beyond Net Zero: How to Mobilize Passive Investing Towards Paris Alignment With a Focus on the United States. n.d. https://www.wri.org/research/beyond-net-zero-how-mobilize-passive-investing-towards-paris-alignment-focus-united-states.

Wikipedia

{{cite report |author=World Resources Institute |title=Beyond Net Zero: How to Mobilize Passive Investing Towards Paris Alignment With a Focus on the United States |url=https://www.wri.org/research/beyond-net-zero-how-mobilize-passive-investing-towards-paris-alignment-focus-united-states |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendbeyond, author = {{World Resources Institute}}, title = {{Beyond Net Zero: How to Mobilize Passive Investing Towards Paris Alignment With a Focus on the United States}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/beyond-net-zero-how-mobilize-passive-investing-towards-paris-alignment-focus-united-states}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }