Climate change a long-term threat to investment, UN tells investors

More than 500 investors have been told by the UN’s climate chief to invest in low-carbon technologies in order to avoid losing money over the long-term because of economic risks posed by climate change.

People from the global finance industry met Christiana Figueres on Wednesday at the 2014 Investor Summit on Climate Risk, which is organised by sustainable investment coalition Ceres.

“The pensions, life insurances and nest eggs of billions of ordinary people depend on the long-term security and stability of institutional investment funds. Climate change increasingly poses one of the biggest long-term threats to those investments and the wealth of the global economy”, Figueres told delegates at the event.

“Institutional investors who ignore the risk face being increasingly seen as blatantly in breach of their fiduciary duty to their beneficial owners – men and women who have worked hard all their lives to put away something for their retirement and for their children.”

Figueres recently said that in order to ditch fossil fuels, global investment in clean energy needed to rise from $300 billion to $1 trillion per year.

She said that if companies acted sooner to minimise the risks, they would be the first to benefit from a low-carbon economy.

“I urge institutional investors to request companies they are invested in to disclose their carbon footprint and potential stranded assets such as those linked to the mining, exploration and burning of fossil fuels, and for members of pension funds to hold their trustees to account in this respect”, Figueres added.

Ceres president Mindy Lubber said that although the cost of renewables was becoming more and more competitive and investment was growing, it is not yet at the scale that is needed.

“Companies and investors must support the adoption of the necessary policies that that will open the floodgates for investment capital from all asset classes to flow into clean energy”, she said.

Further reading:

UN climate chief: clean energy needs investment worth $1tn a year

Biggest global investors call for urgent action on climate change

Bloomberg launches tool to evaluate ‘unburnable’ carbon risks

Report says investing in fossil fuels is a ‘very risky decision’

CDP: investors urge companies to improve sustainability