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Wednesday, 1 April

$37 Trillion Worth Of Investment Demands Climate Change

Scenes from COP25

631 institutional investors, managing more than $37 trillion in assets, have urged governments to step up efforts to tackle the global climate crisis.

At the United Nations Climate Conference (COP25). a Global Investor Statement to Governments on Climate Change​, urged governments to phase out thermal coal power, put a meaningful price on carbon pollution, end subsidies for fossil fuels and ​update and strengthen nationally-determined contributions to meet the goals of the Paris Agreement.

In September, companies with a combined market capitalisation of over US$2.3 trillion and 4.2 million employees from 28 sectors and headquartered in 27 countries, all committed to set climate targets across their operations and value chains aligned with reaching net-zero emissions by no later than 2050.

In October, 23 leading commercial property owners with £300 billion assets under management signed a similar climate change agreement - by COP25, that group had grown in size to 177 companies.

Those 177 companies collectively represent over 5.8 million employees, spanning 36 sectors and with headquarters in 36 countries. The companies have a combined market capitalisation of over US$2.8 trillion, and represent annual direct emissions equivalent to the annual total CO2 emissions of France.

In October 2014, under the banner of the Portfolio Decarbonisation Coalition, companies with $100 billion of investment in properties around the world committed to withdraw their funds from those assets that were not making a real effort to reduce their carbon emissions.

 

COP25

The Global Investor Statement issued on 9 December 2019, reads: 'The global shift to clean energy is underway but much more needs to be done by governments to accelerate the low carbon transition and to improve the resilience of our economy, society and the financial system to climate risks,' 'there can be no ambition gap in preventing global average temperatures from rising beyond the 1.5 degree threshold that scientists warn could trigger catastrophic and irreversible effects of climate change'.

United Nations Secretary-General António Guterres told  the Heads of State and Government who came to the Conference of the Parties (COP): “These investors, the business community and the finance community are demanding political leaders to enhance climate action, to end subsidies to fossil fuels and to put a price on carbon.”

 

Immense influence

"Investors with $37 trillion in assets under management calling for our government leaders to act quickly and boldly on the global climate crisis is quite extraordinary,” noted ​Mindy Lubber, CEO of Ceres one of the seven investment collaborations behind the Global Investor Statement.

"With the immense influence that these investors hold in our economy, government leaders ought to respond to this collective call to action with the urgency and ambition required to power a net-zero emissions economy.”

“Investors are clear that governments should be much more ambitious in addressing climate change,” ​said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC).​“The science shows we need to achieve climate neutrality by 2050 at the latest. Several leading economies have already set net-zero emissions targets and other countries must now follow their lead.”

 

Asia

“As investors in Asia and all regions are increasingly looking to allocate more capital into low carbon investments, they are urging governments and policy makers to unlock the barriers to enable the necessary transition to net-zero carbon economies,” said ​Rebecca Mikula-Wright, Director, Asia Investor Group on Climate Change (AIGCC)​. “The Investor Agenda has a pivotal role to play as a platform for supporting investors to lead ambition and catalyse sustainable investment, while promoting engagement across all regions and jurisdictions.”

 

Could not be clearer

“Global investors with US$37 trillion in assets under management are demanding that governments implement robust and credible climate change policy to reduce the costs of climate change for the global economy and for the communities we live in,'' said ​Emma Herd, Chief Executive Officer, Investor Group on Climate Change (IGCC)​. “Global investors could not be clearer, governments must step up and deliver the policy ambition needed to manage the costs of climate change. Without ambitious climate goals, supported by investable policy, climate change as a risk to financial stability will continue to ratchet.”

“The Investor Agenda provides an unprecedented global forum for investors to accelerate action on climate change and drive transformation of capital markets to deliver a 1.5-degrees Celsius economy. To do that investors need to take further action themselves, but also require stronger incentives from governments,” said ​Paul Simpson, CDP CEO."

“The Investor Agenda has a critical role to play in compelling investors to act and bring about lasting change around climate,” said ​Fiona Reynolds, CEO of Principles for Responsible Investment (PRI).​“Ambition and meaningful action from governments, business and the financial sector is imperative to curb the current trajectory of global warming.”

Picture: Scenes from COP25.

Article written by Brian Shillibeer

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