Nearly 350 global institutional investors have called on government leaders on the eve of the Climate Summit to provide stable, reliable and economically meaningful carbon pricing that helps redirect investment on a scale necessary to effectively deal with global climate change.
The investors — BlackRock, CalPERS, PensionDanmark, Deutsche, South African GEPF, Australian CFSGAM, Cathay Financial Holdings and others — which represent over $24 trillion in assets, are also asking that plans be developed to phase out subsidies for fossil fuels.
A statement released yesterday outlines specific activities the investors are committing to take to mitigate climate change. These activities include direct low carbon investments, the creation of low carbon funds, company engagement, and reducing exposure to fossil fuel and carbon intensive companies.
The statement was coordinated by four investor groups on climate change – 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 – with the United Nations Environment Program Finance Initiative and Principles for Responsible Investment.
According to Mindy Lubber of INCR and Ceres, it is significant that the largest institutional investors from around the world agree that unchecked climate change puts their investments at risk and are stating they can’t afford to wait any longer for a climate deal.
The need for change has been a message heard a great deal in recent months through an analysis from the World Bank and the ClimateWorks Foundation, a report by the Global Commission on the Economy and Climate, and by a Carbon Disclosure Project report which noted that major companies in the US, such as Dow Chemical, Goldman Sachs, Microsoft and ExxonMobil were incorporating an internal carbon price into their business decisions.
According to the International Energy Agency, the world must invest at least an additional $1 trillion per year into clean energy by 2050 in order to limit global warming to 2 degrees Celsius. Global investment in clean energy was $254 billion in 2013.
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