13 Sept 2022 – Today investor groups from around the world publicly released a statement signed by 532 institutional investors with US$39 trillion in assets under management (AUM), advocating for governments to enact ambitious policies that would leverage the private capital required to effectively address the climate crisis.
The 2022 Global Investor Statement to Governments on the Climate Crisis is the most ambitious statement to date in terms of the policy recommendations contained within it, calling on governments to raise their climate ambition in line with the goal of limiting global temperature rise to 1.5°C. The most ambitious actions called for include mandated climate transition plans from investors. In calling for this action, investors are directly asking for more climate disclosure regulation in the finance sector, in addition to calling for climate regulation of companies.
The statement also covers new policy areas not addressed in previous statements, including a focus on tackling methane pollution, climate adaptation and resilience, and scaling up climate finance for developing countries. Investor signatories to the statement are specifically urging governments to implement five priority policy actions rapidly, that will allow them to invest the trillions needed to respond to the climate crisis.
The full list of policy recommendations can be found in the statement, but a summary is as follows. Investors urge governments to:
- Ensure that the 2030 targets in their Nationally Determined Contributions align with the goal of limiting global temperature rise to 1.5°C.
- Implement domestic policies across the real economy and take early action to ensure that their 2030 greenhouse gas emissions are aligned with the goal of keeping global temperature rise to 1.5°C.
- Contribute to the reduction in non-carbon dioxide greenhouse gas emissions and support the effective implementation of the Global Methane Pledge to reduce emissions by at least 30 percent from 2020 levels by 2030.
- Scale up the provision of climate finance from the public and the private sector for mitigation, and for adaptation and resilience, with a particular focus on the needs of developing countries.
- Strengthen climate disclosures across the financial system.
UNEP FI Head and member of the Investor Agenda Steering Committee Eric Usher said:
“From its perspective of bringing together the world’s asset owners, banks and insurers to achieve net-zero emissions by 2050, UNEP FI wholeheartedly supports the Global Investor Statement to Governments on the Climate Crisis, calling for more robust policies that enable private capital mobilization toward climate mitigation, adaptation and resilience. The just transition cannot be achieved without the collaboration of all stakeholders; only by working together can governments, investors, businesses and society respond to the climate crisis effectively.”
Coordinated by the Founding Partners of the Investor Agenda – 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 statement has already garnered 532 signatures from investors with US$39 trillion in assets under management and remains open for signature until the United Nations Climate Conference (COP27) in November.
“Investors are urgently seeking to manage their exposure to climate risks and increase the contribution that their investments make to the Paris Agreement goals. Investors are taking action as it is not only permitted by law but is in many cases required to ensure their ability to generate returns in the long-term as a core fiduciary duty and benefit from the opportunities associated with the shift to a net-zero emissions economy. We encourage governments to engage closely with investors to make sure these risks are effectively managed and that these opportunities are fully realized,” the investor statement reads.
Asia Investor Group on Climate Change (AIGCC) and Investor Group on Climate Change (IGCC) CEO and Investor Agenda Steering Committee member, Rebecca Mikula-Wright, said: “This is a powerful call from investors for governments to strengthen, broaden and accelerate their climate policies. To keep 1.5°C in reach, protecting their citizens and economies, governments must adopt credible targets now, starting by setting deadlines for phasing out fossil fuels, supporting clean energy, and incentivizing decarbonization across economies. We are making this call now, knowing that a rapid, orderly and just transition is essential for the prosperity and economic stability that investors, citizens and governments all want to see.”
CDP Head of Capital Markets, North America and Investor Agenda Steering Committee member, Pratima Divgi, said: “Time is fast running out to limit global warming to 1.5°C and ensure a net-zero, nature positive economy by 2050. The 2022 Global Investor Statement highlights the importance of robust climate policy frameworks in creating a level playing field and allowing financial institutions to allocate capital towards the transition to a sustainable and resilient economy. We are encouraged by the strength of this collective statement from investors and hope that governments around the world respond to their call.”
Ceres CEO and President and Investor Agenda Steering Committee member, Mindy Lubber, said: “Investors need strong, effective climate policies to confidently direct capital flows to where they’re needed for the transition to a just, net-zero emissions economy by 2050 or sooner. Investors from all over the world are asking governments to step up to the urgency of the moment and enact policies the world needs to avert the worst of the climate crisis and that investors need to usher in a new era of economic prosperity built around a just, sustainable, clean energy economy. We hope governments listen and join investors in building this prosperous, just and livable future.”
Institutional Investors Group on Climate Change (IIGCC) CEO and Investor Agenda Steering Committee member, Stephanie Pfeifer, said: “It will require collaboration and commitments from many stakeholders, but Governments and policy makers around the world have the most important role to play in decarbonizing the global economy. Critically, by setting ambitious net zero targets that are backed up by supportive and clear domestic policies across the real economy, Governments can act as a powerful catalyst to facilitate the investment and shift in capital allocation necessary to make net zero a reality. The Global Investor Statement to Governments on the Climate Crisis is a major and urgent call to action from investors to Governments asking them to step up.”
Principles for Responsible Investment (PRI) CEO, David Atkin, said: “Once again, investors are issuing a clear call to governments on the urgent need for public policy to reflect and support investor action. We know that more ambitious action on climate is needed, a fact compounded by increasing geopolitical tension and the devastation caused by intensifying extreme weather events. Never has the need for a bold, effective and coordinated policy response on climate been more pressing, and we urge governments – on behalf of investors – to heed these calls and take action.”
About The Investor Agenda
The Investor Agenda is a common leadership agenda on the climate crisis that is unifying, comprehensive, and focused on accelerating investor action for a net-zero emissions economy. The founding partners of The Investor Agenda are seven major groups working with investors: 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. For more information, visit theinvestoragenda.org and follow @InvestorAgenda on Twitter.
Investors still have time to support this growing call for increased government ambition and action on the climate crisis. They can go to the Investor Agenda website and sign on to the 2022 Global Investor Statement to Governments on the Climate Crisis here. Investors are also encouraged to develop and implement comprehensive Investor Climate Action Plans (ICAPs) and align their investments with the goal of net-zero emissions by 2050 or sooner, with credible interim targets, among other actions.