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A group statement signed by 259 global investors, with collective assets totalling over US$15 trillion, calls for stronger policies to incentivise more private capital going into sustainable investments
The group statement expresses concern for “risks presented by climate change to regional and global economies and to individual assets” but that the signed investors are interested in the economic opportunities of a low-carbon economy.
Within the group statement are investors from the United States, Europe, Asia, Australia, South Africa, Brazil and Canada including European investors and US public pension funds and state treasurers.
There are a number of Australian super funds listed as signatories through their association with UN Principles for Responsible Investment (UNPRI) including UniSuper and Local Government Super.
The global statement said current lack of stable policy frameworks prevents optimal risk-adjusted returns on investments, asking for “clear, credible, and long-term policy frameworks that shift the risk-reward balance in favor of less carbon-intensive investment.”
Specifically, the statement asks for domestic policy framework in clean energy and infrastructure to give investors confidence in long-term risk-adjusted returns, international agreement on climate financial architecture for major environmental issues to “bolster investor confidence, and allow financing to flow”.
Finally the group asks for international finance tools to reduce the high levels of risk for investors with investments in developing countries.
“Investors need greater policy certainty from governments. Deferring climate change agreement adds to investor concerns that climate change risks and costs are not taken seriously,” said Donald MacDonald, chair of UNPRI, one of the super funds involved in the group statement.
In 2008, the global environmental damage caused by human activity in 2008 represented a monetary value of $ 6.6 trillion, equivalent to 11 per cent of global GDP, according to a study by PRI and UNEP Finance Initiative.
Elise Burgess