Let's get a move on with climate change, say institutional heavy hitters

Oliver Gill
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The Paris Agreement sets out a global framework for dealing with carbon emissions from 2020 (Source: Getty)

Institutional investors representing nearly £10 trillion of assets have urged G20 leaders to ratify a climate deal to shift away from fossil fuels.

Six coalitions representing 130 investors - including the BT Pension Scheme, CBRE Global Investors, HSBC Global Asset Management and L&G Investment Management - clubbed together and wrote to world leaders ahead of the G20 summit, due to start on 4 September in China.

The Paris Agreement set out the United Nations Framework Convention on Climate Change – a structure that set the foundations for dealing with greenhouse emissions from 2020.

While it was it was adopted following negotiations – 180 members signed up to the treaty – it has only been ratified by a handful of members: so far only 23 countries have ratified it.

Key players, such as the US and China, have indicated they will be ready to rubber-stamp it later this year.

Addressing the letter which set out a six point plan of recommendations to the G20, chief executive Stephanie Pfeifer of Institutional Investors Group on Climate Change – one of the six groups – said:

The Paris Agreement provides a clear signal to investors that the transition to the low-carbon, clean energy economy is inevitable and already underway.

Governments must ratify the Paris agreement swiftly and have a responsibility to implement policies that drive better disclosure of climate risk, curb fossil fuel subsidies and put in place strong pricing signals sufficient to catalyse the significant private sector investment in low carbon solutions required to realise the agreement’s goals.

The letter urged the G20 leaders to:

  • Ratify the Paris Agreement by the end 2016.
  • Implement recommendations by the Global Investor Statement on Climate Change relating to carbon pricing that helps redirect investment that is commensurate with the scale of climate change.
  • Support doubling global investment into clean energy by 2020
  • Prioritise the national level implementation of climate change strategies
  • Prioritise national financial regulators to require companies to include climate risk disclosures
  • Welcome the work of the G20 green finance group – enhancing the contribution of "greening" financial flows