Leading institutional investors call for ambitious climate deal

Ahead of a meeting of world leaders in New York to discuss a climate deal next week, more than 340 global institutional investors, representing over $24 trillion (£14.6tn) in assets, have called for governments to take action and provide a stable, reliable and economically meaningful carbon price.

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Four investment groups – Ceres’ Investor Network on Climate Risk in the US, the European Institutional Investors Group on Climate Change, the Investors Group on Climate Change in Australia and New Zealand, and the Asia Investor Group on Climate Change – co-ordinated the statement.

The breadth and value of the institutional investors involved, which includes Blackrock, AXA and Legal & General, demonstrates how the issue of climate change is material to finance and is moving up the agenda.

In a statement, the institutions said, “Gaps, weaknesses and delays in climate change and clean energy policies will increase the risks to our investments as a result of the physical impacts of climate change, and will increase the likelihood that more radical policy measures will be required to reduce greenhouse gas emissions. 

“In turn, this could jeopardise the investments and retirement savings of millions of citizens.”

The investors involved acknowledge that they have a vital role to play in transitioning economies from around the world to low-carbon and green economies. The statement points out the International Energy Agency has estimated that limiting the increase in global temperature to below 2C above pre-industrial levels, the internationally agreed limit, requires an average investment of $1 trillion (£610bn) a year in clean energy from now until 2050.

However, in order to achieve this, the coalition of investors calls on policymakers to take action that supports, rather than limits, investments in clean energy and climate solutions.

They add, “Stronger political leadership and more ambitious policies are needed in order for us to scale up our investments.”

Achim Steiner, UN under-secretary-general and executive director of the UN Environment Programme, commented, “The perception prevails that we need to choose between economic well-being or climate stability. The truth is we need both, and we know we can achieve both.”

He continued, “What is needed is an unprecedented re-channelling of investment from today’s economy into the low-carbon economy of tomorrow. Investors are owners of large segment of the global economy as well as custodians of citizens’ savings around the world. Having such a critical mass of them demand a transition to the low-carbon and green economy is exactly the signals governments need in order to move to ambitious action quickly.”

Photo: 401(K) 2012 via Flickr 

Further reading:

EY survey: majority of institutional investors considering sustainability

Investors committing to fossil fuel divestment face challenge in finding alternatives, says study

IPCC findings demand investment in a sustainable future, say investors

Solar energy investment ‘coming of age’ and attracting institutional investors

Myth of sustainable investment performance sacrifice ‘finally withering away’