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Investors worth trillions in assets under management call for more decisive climate action

21 November 2012
Investors worth trillions in assets under management call for more decisive climate action

LONDON: Global investor groups worth trillions in assets under management, today issued an open letter addressed to governments of the world's largest economies which calls for more decisive climate change policy, in a bid to avoid dangerous climate change and its soaring economic impacts.

The letter, which is published ahead of next week's COP18 in Doha - and in the wake of President Obama's re-election and Chinese leadership change - draws on investor experience and calls for:

  • Clear and consistent policies to encourage low carbon investment
  • Knowledge sharing between governments on the most effective climate and clean energy policies
  • Strong international agreements that send clear market signals on the future of climate policy and emission reductions targets

The letter comes days after the 2012 International Energy Agency World Energy Outlook announced that current policies and trends are leading us towards a long-term average global temperature increase of 3.6°C, a figure scientists say could trigger irreversible changes to our ecosystem. 

Put together by the European Institutional Investors Group on Climate Change (IIGCC), the North American Investor Network on Climate Risk (INCR), the Australia/New Zealand Investor Group on Climate Change (IGCC), the Asia Investor Group on Climate Change (AIGCC) and the United Nations Environment Programme Finance Initiative (UNEP FI), the letter is also supported by the UN-backed Principles for Responsible Investment Initiative (PRI).

Today the four regional climate change investor groups – IIGCC, INCR, IGCC and AIGCC – also announced the formation of the Global Investor Coalition on Climate Change (GIC) to represent the international investment community on climate change policy and investment issues on a global scale. The GIC will work with other networks including UNEP FI, PRI and the Carbon Disclosure Project (CDP).

Stephanie Pfeifer, Executive Director, IIGCC said: “Serious climate change will only be averted if governments and private investors work together. With severe weather events increasing in frequency and intensity, economic losses as a result of these events is increasing in turn. These losses impact upon the investments and retirement savings of billions of people. Well-designed, stable policy which stimulates clean energy investment is essential to put economies on a low carbon path and avert the serious economic impacts of climate change.”

Chris Davis, Director of Investor Programs at Ceres and INCR said: “Strong carbon-reducing government policies are an urgent imperative. Hurricane Sandy, which caused more than $50 billion in economic losses, is typical of what we can expect if no action is taken and warming trends continue. Investors are rightly concerned about the short and long-term economic risks of climate change and understand that ambitious climate and clean energy policies are urgently needed to avoid catastrophic impact.”

Karsten Loeffler (Allianz), a member of UNEP FI’s Climate Change Advisory Group (CCAG) said: “Investors are ready to support policymakers in the transition to a low-carbon economy but the right framework conditions are still missing. A renewed dialogue could help unlock efforts at different stages of the investment chain. The roll-out of a market-driven pricing of carbon would help sending the appropriate investment signal to place low-carbon assets into the mainstream of capital markets.”

Read the letter here.

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