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Sep 15, 2021

Huge investor coalition urges governments to accelerate climate action

Nearly 600 investment firms sign statement calling for range of policy changes

A huge investor coalition has called on national governments to accelerate policy changes that will support investment in climate change solutions.

A group of 587 investment firms with a collective $46 tn in assets under management yesterday issued a statement urging governments to take a range of actions, from strengthening emissions targets to mandating climate reporting and ending fossil fuel subsidies.

Signatories to the 2021 Global Investor Statement to Governments on the Climate Crisis include major institutions such as Allianz Global Investors, State Street Global Advisors, Legal & General Investment Management and CalPERS.

The statement warns that if investors and governments do not step up their action against climate change, the world could heat up by more than 3°C this century, far surpassing the 1.5°C limit set by the Paris Agreement.

‘To achieve this common goal, we must work together to reduce global net carbon dioxide emissions by 45 percent from 2010 levels by 2030, with a dramatic reduction of all greenhouse gas emissions essential for reaching net-zero emissions by 2050 or sooner,’ the statement reads.

The call comes ahead of the United Nations Climate Change Conference, also known as COP26, which is due to take place in Glasgow, UK in November. New signatories will be able to join the campaign up until the conference.

The statement sets out five main requests for governments:

  1. Strengthen nationally determined contributions – national commitments to reduce carbon emissions – for 2030 before COP26 and plan for net-zero emissions by 2050
  2. Commit to net-zero emissions by 2050 and create a transition plan with ‘ambitious interim targets’
  3. Bring in domestic policies to support national climate targets, such as carbon pricing, removing subsidies for fossil fuels and avoiding new carbon-intensive projects
  4. Make sure Covid-19 recovery plans support the transition to a low-carbon economy
  5. Implement mandatory climate disclosure rules that align with TCFD recommendations.

The statement has been created by the founding partners of The Investor Agenda, which co-ordinates investor action over climate change. The partners are 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 number and caliber of institutional investors that have signed the 2021 Global Investor Statement shows governments that if – and only if – the right policy framework and science-based targets are put in place, the ambition and capability are there to put capital behind the transformation required for achieving a net-zero economy,’ Paul Simpson, CEO of CDP, says in a statement.

‘We are seeing once again that there is huge mitigation and adaptation potential waiting to be unlocked – governments should be using the momentum of corporate progress to advance ambitious, net-zero-aligned policies that tackle the broader environmental impact and in turn provide companies and financial institutions with further clarity and confidence.’

Climate change is currently ‘widespread, rapid and intensifying,’ according to a report from the Intergovernmental Panel on Climate Change released last month, but the effects can be limited by ‘strong and sustained reductions in emissions.’