Largest Group Ever of World Investors
Calls For Strong Global Climate Change Treaty
Strong Policies Will Drive Critical Low-Carbon Investments;
NY State Comptroller DiNapoli, Lord Nicholas Stern Join Investors
NEW YORK CITY — 181 investment organizations, representing more than $13 trillion in assets, issued a joint call today for strong action this year from U.S. and international policy makers in the fight against global warming.
Amid growing focus on upcoming international climate treaty talks and Congressional debate of climate and energy legislation, global investors meeting here issued a major policy statement calling for a strong and binding international treaty that will reduce pollution and catalyze massive global investments in low-carbon technologies. Today’s investor statement is the largest of its kind on climate change in world history.
Investors released the statement at an all-day International Investor Forum on Climate Change hosted by New York State Comptroller Thomas P. DiNapoli and keynoted by British economist Lord Nicholas Stern.
“We must chart a new course toward long-term, sustainable business practices,” said DiNapoli, head of the $116.5 billion New York State Common Retirement Fund. “We cannot drag our feet on the issue of global climate change. I am deeply concerned about the investor risks climate change presents, and the human cost of inaction is unthinkable. As investors in the global economy, we can lead the way toward a future of lasting prosperity.”
“Investors have a crucial role to play in building a low-carbon, energy efficient global economy,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, which co-convened today’s forum. “But without strong policies that encourage clean technologies and discourage high-polluting technologies, their hands are tied.”
“Unmitigated climate change poses a threat to the global economy," said Stern, chair of the Grantham Research Institute on Climate Change at the London School of Economics and Special Advisor to the Group Chairman of HSBC on Economic Development and Climate Change. “But building a low carbon economy creates opportunities for investment in new technologies that promise to transform our society in the same way as the introduction of electricity or railways did in the past.”
Today’s forum comes in advance of key negotiations in Copenhagen this December to ratify a new international climate change treaty after the Kyoto Protocol expires in 2012. The outcome of those climate talks depends heavily on the course of debates in the U.S. Congress on climate and energy legislation. The House passed a comprehensive bill in June and Senate consideration of a similar climate bill is expected to begin within weeks.
“In answering those who question why the U.S. should adopt strong climate change policies, it’s not strong enough to say we have an obligation,” said California State Treasurer Bill Lockyer. “We owe a duty to all those who come after us to act now. If we fail to lead, if we adopt the attitude that we’re not going to act until enough other nations act, we will violate that duty. And we will run an even greater risk of leaving future generations a damaged planet and diminished hopes for prosperity.”
The statement calls for the following elements to be included in a global climate change treaty:
- A global target for emissions reductions of 50-85% by 2050 (1990 baseline);
- Developed country emissions reduction targets of 80-95% by 2050 with interim targets of 25-40% by 2020 backed up by effective national action plans;
- Developing country action plans that deliver measurable and verifiable emission reductions;
- Government support for energy efficient and low-carbon technology;
- Measures that support the move to an effective global carbon market, including ambitious caps, fair and efficient allocation of allowances and links between different trading schemes;
- Revisions to the Clean Development Mechanism to ensure real, permanent and verifiable emission reductions;
- Public financing mechanisms that leverage private sector finance for investment in developing countries;
- Measures to reduce deforestation and promote afforestation; and
- Support for adaptation to unavoidable climate change impacts.
Signatories to the statement include state treasurers, controllers, pension fund leaders, asset managers and foundations worldwide. To see the list of signers, visit http://www.ceres.org.
“The stage is set for a series of decisions which will be critical to how climate change investment advances post-2012,” said Peter Dunscombe, Chairman of IIGCC. “To-date investment decision-making has been hampered by weak, disparate and uncertain policies, as well as short-time horizons. The specific measures we have called for today will provide a much more supportive investment environment, thus enabling long-term private sector investment and liquidity essential to address climate change. Failure to act is an option which carries with it damaging consequences.”
Corporate voices at the forum also echoed the investors’ call for strong climate and energy policies. “PSEG stands ready to invest in clean energy technologies and create green jobs,” said Ralph Izzo, president, chairman and CEO at Public Service Enterprise Group, Inc. (PSEG). “However, strong
climate policies at the national level – aligned with international commitments – are essential to successfully address the climate challenge. This includes establishing a price on carbon that will afford businesses the certainty they need to invest in a new green energy economy.”
The Investor Forum was sponsored by the New York State Comptroller, Ceres, the European Institutional Investors Group on Climate Change (IIGCC), the Investors Group on Climate Change (IGCC) Australia/New Zealand, the P8 Group and UNEP Financial Initiative.
The New York State Common Retirement Fund exists to provide benefits to more than one million state and local government employees, retirees and beneficiaries. DiNapoli last year committed to investing $500 million over a three-year period in green businesses. To date, the Fund has invested $200 million under DiNapoli's Green Strategic Investment Program.
Ceres is a leading coalition of investors and environmental groups working with companies to address sustainability challenges such as climate change. Ceres also directs the Investor Network on Climate Risk, an alliance of 80 institutional investors with collective assets totaling more than $7 trillion.
The Institutional Investors Group on Climate Change (IIGCC) is a forum for collaboration on climate change for European investors. The group’s objective is to catalyze greater investment in a low-carbon economy by bringing investors together to use their collective influence with companies, policymakers and investors. The group currently has 56 members, representing assets of around €4trillion.
The Investor Group on Climate Change Australia/New Zealand (IGCC, Australia/New Zealand) represents institutional investors operating in Australia and New Zealand, with assets around A$500 billion, and others in the investment community interested in the impact of climate change on investments. The IGCC aims to ensure that the risks and opportunities associated with climate change are incorporated into investment decisions for the ultimate benefit of individual investors.
The United Nations Environment Programme Finance Initiative (UNEP FI) is a global partnership between UNEP and the financial sector. Over 170 institutions, including banks, insurers, fund managers and investors, work with UNEP to understand the impacts of environmental and social considerations on financial performance.