A group of 285 investors worth $20 trillion, including ABN Amro, Swiss Re, BNP Paribas, HSBC and CalPERS, have called on governments to create short-, medium- and long-term greenhouse gas targets, and enforceable legal mechanisms and timelines for delivering those reductions.
The U.N. Environment Programme described the grouping as the largest-ever investment coalition, by both number of signatories and assets under management, to call for policy action on climate change.
In a statement, the investors called for comprehensive energy and climate change policies to accelerate the deployment of energy efficiency, renewable energy, green buildings, alternative-fuel vehicles and low-carbon transportation infrasturcture.
They called for financial incentives to shift the “risk-reward balance” in favor of low-carbon assets, by created strong carbon markets and other incentives for private investment in clean energy. They said the dismantling of fossil-fuel subsidies would be integral to this effort.
They also called for corporate disclosure of matieral climate change-related risks, and for an international climate change regime, binding all major emitters to short-, medium- and long-term GHG reduction goals.
The signatories were coordinated by the Investor Network on Climate Risk (INCR), the European Institutional Investors Group on Climate Change (IIGCC) and the Investors Group on Climate Change (IGCC) in Australia and New Zealand, with help from the United Nations Environment Programme Finance Initiative (UNEP FI), and the Advisory Council of the Principles for Responsible Investment (PRI).
They made their call at the start of the UNEP FI Washington D.C. Global Roundtable, a two-day summit at which an assembly of CEOs and former heads of government are planning to call for “a profound reform of the global financial system,” according to UNEP.
At the sane time the three investor groups and UNEP FI released a report outlining policies that they said would enable institutional investors to allocate capital towards climate change solutions, including government incentives to compensate for heightened risk and sufficient scale of technology deployment. The report says that long-term policy stability is critical and retroactive changes can significantly damage investor confidence.
But UNEP says that signatories to the statement do not necessarily endorse the report contents.
UNEP said investor support for climate action has more than doubled since November 2008, when 150 investors with $9 trillion in assets under management first came together to urge government leaders to act on climate change.
But it says that current levels of investments in low-carbon technology and infrastructure are substantially lower than the $500 billion per year deemed necessary by the International Energy Agency to hold the increase of global average temperatures below 2 degrees Celsius – the target agreed in Cancun last year.
Investors sent the statement and report to the G20 and other governments in anticipation of the United Nations Framework Convention on Climate Change at Durban, which starts next month. Investors there will call for domestic and international policy action.