Investor groups representing trillions of dollars from Asia, North America, Europe, Australia and New Zealand have joined the UN-backed Principles for Responsible Investment in forming the Global Investor Coalition on Climate Change (GICCC) and issuing an open letter to world leaders calling for new dialogue on climate change.
The letter, issued shortly after the re-election of US President Barack Obama and a change in the leadership of China, calls for ‘clear, consistent and predictable policies that encourage low-carbon investment’ as well as ‘knowledge sharing between governments on effective climate and clean energy policies’ and ‘stronger international agreements that send clear market signals about the future of climate policy.’
Europe’s Institutional Investors Group on Climate Change (IIGCC), North America’s Investor Network on Climate Risk, Australia and New Zealand’s Investor Group on Climate Change, the Asia Investor Group on Climate Change and the UN Environment Programme Finance Initiative also announced they were joining forces ‘to represent the international investment community on climate change policy and investment issues at a global level.’
‘Serious climate change will be averted only if governments and private investors work together,’ says Stephanie Pfeifer, executive director of the IIGCC, in a statement announcing the formation of the new group and the open letter.
‘With severe weather events increasing in frequency and intensity, economic losses as a result of these events is increasing in turn. Well-designed, stable policy that stimulates clean energy investment is essential to put economies on a low-carbon path and avert the serious economic impacts of climate change.’
In the open letter, the group says a concerted effort to combat climate change must include clear goals to reduce greenhouse gas emissions, deadlines for measures to curb climate change and ‘incentives to shift the risk/reward balance away from high-carbon to low-carbon investment.’
The newly formed GICCC represents more than $22 tn in total funds under management and, through the various local groups, includes investors such as CalPERS, HSBC Investments, BlackRock, West Midlands Pension Fund, Allianz and the New York City Employees’ Retirement System.
‘Investors are ready to support policymakers in the transition to a low-carbon economy but the right framework conditions are still missing,’ says Karsten Loeffler, who signed the letter for Allianz. ‘The roll-out of a market-driven pricing of carbon would help in sending the appropriate investment signal to place low-carbon assets into the mainstream of capital markets.’
