Thursday, November 13, 2008

Investors Call For Climate Agreement Despite Financial Crisis

Nov 11: More than 130 leading investors, representing assets worth $6.4 trillion, warned world leaders that any global agreement on climate change must be strong and binding to guarantee necessary financing for global emissions reduction and adaptation efforts, and that the financial crisis should not delay efforts to address rising global temperatures. In a joint Statement sent to Heads of State and climate negotiators, investors called for a strong, binding framework to succeed the Kyoto Protocol, warning that clear and long-term policy signals are essential if investors are to allocate the huge amounts of private capital required to fund the transition to a low-carbon economy.

The Statement was sent by some of the world’s largest asset managers and pension funds, collectively representing $6.4 trillion in assets. It was coordinated by three leading investor groups on climate change -- (the US-based 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). Peter Dunscombe, Chairman, Institutional Investors Group on Climate Change said, "We are urging world leaders to provide the policy framework that will help investors drive the financial flows necessary to address this urgent crisis. A strong global agreement will provide companies, governments and investors with the incentives to act quickly and efficiently in tackling climate change”.

According to a release, the investors believe that the downturn in the global economy should not delay an international agreement on climate change, and that the agreement must be concluded by the end of 2009. As investors with diversified portfolios, they are concerned about the impacts of climate change on investments in individual companies and other asset classes such as property and the global economy as a whole. Mindy Lubber, Ceres President and Director of the Investor Network on Climate Risk said, “The climate crisis is a multi-generational challenge that requires strong national and international policies immediately. World leaders must shun the excuse that it is too expensive to act to curb global warming. It is too expensive not to act.”

The Statement outlines in detail what investors are looking for from policymakers in order to allocate capital in a way that supports both the transformation to a low carbon economy and the development of adaptation measures. The investors are calling for: A binding global target for reducing greenhouse gas emission reductions informed by the latest available scientific evidence for avoiding dangerous climate change (which suggests that global greenhouse gas emissions must decline by 50-85% by 2050 against a base year of 2000); Long and medium-term emission reduction targets for developed countries which will be backed up by effective national action plans; Contributions from developing countries, initially in the form of national action plans focused on energy efficiency commitments, but with the ultimate aim of absolute emission reductions;

"Continuity in the legally binding framework underpinning the carbon markets and provisions for an expanded and more liquid global carbon market; A review, reform, and expansion of the Clean Development Mechanism; Clear measures to reverse deforestation and value forests as carbon sinks; A commitment to adaptation in order to prepare for, and respond to the physical impacts of climate change."

Access a joint release from the three groups (click here). Access the letter to Heads of State (click here). Access the complete Investor Statement (click here). [*Climate]