In the run-up to the most consequential United Nations climate change conference in years, and on the heels of another urgent warning from the world’s leading scientists, a record number of 587 investors with US$46 trillion in assets under management are urging governments to rapidly implement five priority policy actions that will allow them to invest the trillions needed to respond to the climate crisis.
Signatories to the 2021 Global Investor Statement to Governments on the Climate Crisis are issuing the strongest-ever unified call from investors for governments to raise their climate ambition and implement meaningful policies — including mandatory climate risk disclosure, strengthened national commitments, ending fossil fuel subsidies and phasing out thermal coal — or risk missing out on the enormous investment opportunities in tackling the climate crisis.
“Full implementation of the Paris Agreement will create significant investment opportunities in clean technologies, green infrastructure and other assets, products and services needed in this new economy,” the statement reads.
Following a month which brought more catastrophic weather events around the world, and the alarming predictions of the Intergovernmental Panel on Climate Change that without immediate, rapid and large-scale emissions reductions, limiting global warming to 1.5 degrees Celsius will be beyond reach. The risks this brings to the portfolios of asset managers and owners are enormous.
Investor signatories to the statement are calling on all governments to undertake five priority actions before the 26th United Nations Climate Conference in Glasgow in November (COP26):
- Strengthen their NDCs for 2030 before COP26, to align with limiting warming to 1.5-degrees Celsius and ensuring a planned transition to net-zero emissions by 2050 or sooner.
- Commit to a domestic mid-century, net-zero emissions target and outline a pathway with ambitious interim targets including clear decarbonization roadmaps for each carbon-intensive sector.
- Implement domestic policies to deliver these targets, incentivize private investments in zero-emissions solutions and ensure ambitious pre-2030 action through: robust carbon pricing, the removal of fossil fuel subsidies by set deadlines, the phase out of thermal coal-based electricity generation by set deadlines in line with credible 1.5-degrees Celsius temperature pathways, the avoidance of new carbon-intensive infrastructure(e.g. no new coal power plants) and the development of just transition plans for affected workers and communities.
- Ensure COVID-19 economic recovery plans support the transition to net-zero emissions and enhance resilience. This includes facilitating investment in zero-emissions energy and transport infrastructure, avoiding public investment in new carbon-intensive infrastructure and requiring carbon-intensive companies that receive government support to enact climate change transition plans consistent with the Paris Agreement.
- Commit to implementing mandatory climate risk disclosure requirements aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, ensuring comprehensive disclosures that are consistent, comparable, and decision-useful.
The second wave of signatories to the statement are being announced during the United Nations General Assembly, which will be followed by Climate Week 2021 in New York, when countries will be in the spotlight to demonstrate their climate ambition. The initial signatories to the statement, which included 457 investors with US$41 trillion assets under management, were announced in June 2021, before the G7 Summit.
Signatories to date include some of the world’s largest institutional investors and asset managers and asset owners. The combined assets under management of the 587 signatories is more than US$46 trillion, representing an estimated 40 percent of all global assets under management. This is the largest collective assets under management to sign on to a global investor statement to governments on climate change since the first statement in 2009.
The statement remains open for additional investors to sign before COP26 in November 2021.
Many nations are already improving their climate policies, including 2030 emissions reduction targets, through updated NDCs ahead of COP26. However, significant climate and finance policy gaps remain in almost all nations, and the world is currently not on a trajectory to limit global warming to 1.5 degrees Celsius, underscoring the need for further ambition.
The statement has been developed by The Investor Agenda’s seven founding partners –– Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative. The Investor Agenda provides a common leadership agenda on the climate crisis for investors that is unifying, comprehensive, and focused on accelerating investor action for a net-zero emissions economy.
The founding partners are calling on investors that support increased government ambition on the climate crisis to sign on to the statement via the Investor Agenda website. They are also encouraging investors worldwide to commit to developing comprehensive Investor Climate Action Plans (ICAPs) and to aligning their investments with the goal of net-zero emissions by 2050 or sooner, with credible interim targets, among other actions. Signing the 2021 Global Investor Statement to Governments on the Climate Crisis would itself qualify as an action taken under the Policy Advocacy component of the ICAPs.