Nearly 400 global investors who together manage more than $22 trillion in assets have written to G20 leaders in advance of the G20 summit, urging them to commit to the Paris Agreement and help drive its implementation.
Leaders of the G20 nations are meeting at its annual Summit, being held in Hamburg, Germany, on the 7th and 8th, and before they even meet reports have been swirling that climate change and the aims of the Paris Climate Agreement are going to be a high priority for attending parties — specifically, why the United States has announced it will be withdrawing from the Agreement. Primarily, two leading leaders — the UK’s Prime Minister Theresa May and Germany’s Chancellor Angela Merkel — are both expected to challenge US President Donald Trump on his decision to withdraw his country from the Agreement, and argue that the Agreement does not need renegotiation.
Underscoring the importance of the Paris Agreement and the need for G20 nations to lead the way on climate change mitigation and action, an investor-led movement has sent a letter to G20 leaders urging the nations to commit to fulfilling the terms of the Paris Climate Agreement. The letter is actually a follow-up to a first letter which was sent earlier this year to leaders of the G7 nations, sent by over 200 investors managing $15 trillion. The letter remained open for endorsement until 30 June, and now sees a total of 389 investors managing $22 trillion.
“As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments,” the 389 investors signed on to say (PDF), further urging G20 nations to:
- Reiterate their support for and commitment to implement the Paris Agreement, including the delivery of their own Nationally Determined Contributions in full.
- Bring forward focused and targeted long-term climate and energy plans that will ensure their future actions align with commitments under the pact to keep global average temperature rise to well below 2°C above pre-industrial levels and preferably to 1.5 °C.
- Drive investment into the low carbon transition through aligning climate-related policies, phasing out fossil fuel subsidies and introducing carbon pricing where appropriate.
- Implement climate-related financial reporting frameworks, including supporting the Financial Stability Board Task Force on Climate-related Financial Disclosures’ recommendations.
“We urge all nations to stand by their commitments to the Agreement and to put in place policy measures to achieve their nationally-determined contributions (NDCs) with the utmost urgency. In addition, we ask governments to develop focused and targeted long-term climate plans by which their NDCs become aligned with the Paris Agreement’s goal of “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.”
For more information regarding the work of these investors, check out the Investor Platform for Climate Actions, which currently represents over 400 investors across 40 countries, managing over $25 trillion.
“The G20 must move swiftly to put in place the frameworks required to improve the availability, reliability and comparability of climate-related information, and to ensure carbon pricing signals which will drive the incorporation of climate risks and opportunities into financial assessments,” said Paul Simpson, CEO of CDP, formerly the Carbon Disclosure Project, who participated in coordinating the letter. “That is why investors are calling on G20 leaders to prioritise rulemaking by national financial regulators to require disclosure of ‘material’ climate risks in line with the recent recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD).”
“Investors are sending a powerful signal today that climate change action must be an urgent priority in the G20 countries, especially the United States,” said Mindy Lubber, CEO and president of the sustainability nonprofit organisation Ceres, which directs the Ceres Investor Network on Climate Risk and Sustainability, which was also partly responsible for coordinating the letter. “Global investors are eager to open their wallets to a low-carbon future, but it won’t happen without clear, stable policy signals from countries worldwide – in particular the U.S., whose withdrawal from the Paris Climate Agreement is hugely troubling.”
This is not the first time that investors and investor groups have spoken up and urged the planet’s nations to support climate change action, nor will it be the last time. Earlier this year, a group of investors representing management of $2.8 trillion similarly sent a letter urging G20 nations to end fossil fuel subsidies by 2020. The group of investors included names such as Legal and General, Aegon Asset Management, and Aviva Investors, and as “concerned investors” called on G20 nations to affirm the following statements at the July G20 Summit Meeting:
- Sets a clear timeline for the full and equitable phase-out by all G20 members of all fossil fuel subsidies by 2020, starting with the elimination of all subsidies for fossil fuel exploration and coal production.
- Sets a clear timeline for the phase out of domestic and international public finance for oil, gas and coal production by 2020.
- Commits all G20 members to complete fossil fuel subsidy peer reviews by the end of 2018, building on the leadership of China and the United States in 2016.
“In line with the commitments already made by G20 governments, we need to see a clear plan to phase out subsidies to fossil fuels,” said Meryam Omi, Head of Sustainability and Responsible Investment Strategy at Legal and General.
“The current level of inefficient subsidies and lack of transparency are jeopardising the global goal of meeting the Paris climate targets and of ensuring a secure, healthy and reliable energy system.
“As investors, we are faced with a tremendous opportunity to finance the low carbon transition and, as such, we look for the governments to set a clear timeline and a plan for phasing out fossil fuel subsidies to enable an orderly transition.”
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