* New coalition wants to spur faster energy transition

* Pension funds and insurers commit to zero carbon portfolios

* Asset owners to engage with companies, but may also divest

Insurers and pension funds managing $2.3 trillion pledged on Monday to shift their portfolios away from carbon-heavy industries in the hope of triggering snowballing climate commitments from other big investors. German insurer Allianz, the California Public Employees’ Retirement System (CalPERS), and Swedish pension fund Alecta were among the founders of the new “Net Zero Asset Owner Alliance” launched at a United Nations climate summit.

“Mitigating climate change is the challenge of our lifetime. Politics, business and societies across the globe need to act as one to rapidly reduce climate emissions,” Oliver Baete, chief executive of Allianz, said in a statement.

As accelerating climate impacts become increasingly apparent via heatwaves, wildfires and receding coastlines, the financial sector is under growing pressure from activists, shareholders and regulators to respond. U.N. Secretary-General Antonio Guterres, who organized Monday’s summit to try to boost stalling international efforts to control emissions, sees insurers and pensions funds as a crucial lever to transition the global economy off fossil fuels.

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