* 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
By Matthew Green
UNITED NATIONS, Sept 23 (Reuters) - 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.
These types of companies -- called "asset owners" because they are the principal holders of retirement savings, or are investing customers' insurance premiums -- represent some of the world's largest pools of capital.
Members of the new grouping pledged to align their portfolios with a goal enshrined in the 2015 Paris Agreement to combat global warming to limit the increase in average temperatures to 1.5 degrees Celsius.
The importance of this target was underscored late last year when a report by the U.N.-backed Intergovernmental Panel on Climate Change spelled out the catastrophic consequences for people and nature if the world is allowed to get much hotter.
Under current emissions pledges by governments, the Earth is on track for well over 3 degrees Celsius of warming by the end of the century -- an outcome that scientists say could put the survival of modern industrial societies at risk.
"CalPERS recognizes that climate change poses urgent and systemic risk given our responsibility to protect our members' financial assets and provide the long-term returns that can pay pensions for this and coming generations," said Marcie Frost, chief executive of CalPERS.