Global Investors Urge G7 and G20 to Stand by Paris Agreement and Drive its Swift Implementation
Long-term institutional investors representing more than USD 15 Trillion in assets have written to G7 heads of state urging governments to stand by their commitments to the Paris Agreement at their upcoming Summit in Taormina, Italy on May 26-27.
Underscoring the urgency of action by G7 nations to implement the global climate pact and deliver their emissions reduction commitments (nationally-determined contributions), investors call on G7 leaders to:
- Reiterate their support for and commitment to implement the Paris Agreement, including the delivery of their own Nationally Determined Contributions in full.
- Bring forward focused and targeted long-term climate and energy plans that will ensure their future actions align with commitments under the pact to keep global average temperature rise to well below 2°C above pre-industrial levels and preferably to 1.5 °C.
- Drive investment into the low carbon transition through aligning climate-related policies, phasing out fossil fuel subsidies and introducing carbon pricing where appropriate.
- Implement climate-related financial reporting frameworks, including supporting the Financial Stability Board Task Force on Climate-related Financial Disclosures’ recommendations.
“Investors are sending a powerful signal today that climate change action must be an urgent priority in the G20 countries, especially the United States, whose commitment is in question,” said Mindy Lubber, CEO and President of the sustainability non-profit organization Ceres, which directs the Ceres Investor Network on Climate Risk and Sustainability. “Global investors are eager to open their wallets to a low-carbon future, but it won’t happen without clear, stable policy signals from countries worldwide – in particular, the US government whose waffling on the Paris Climate Agreement is hugely troubling.”
Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC) in Europe added, “Investors recognise the global transition to a low-carbon, clean energy economy is now firmly underway and they want to make well-informed decisions that help Paris Agreement signatories deliver their national commitments. Regardless of what the US administration does, it’s vital that every signatory across the G7 and G20 adopts 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.”
Emma Herd, CEO of the Investor Group on Climate Change (IGCC) in Australia said: “Maintaining policy commitments which drive strong growth in low carbon investment is key to tackling climate change. While the private sector can provide the investment required to build a secure, affordable and low emissions global energy system, we urge the G7 to set strong policy signals which provide the investment certainty needed to drive trillions of dollars into new clean energy investment opportunities.”
Paul Simpson, CEO of CDP added: “The G7 must move swiftly to put in place the frameworks required to improve the availability, reliability and comparability of climate-related information, and to ensure carbon pricing signals which will drive the incorporation of climate risks and opportunities into financial assessments. That is why investors are calling on G7 leaders to prioritise rulemaking by national financial regulators to require disclosure of ‘material’ climate risks in line with the forthcoming recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD).”
“With the US threatening to pull out of the Paris Climate Agreement next week, now is the time for investors to make their voices heard by encouraging governments to stand firm on their commitment to the Paris Agreement,” said Fiona Reynolds, managing director of the PRI. “Investors worldwide have come to understand the material financial risks around climate change. Certainly, at the PRI, our members have noted climate risks as their number one ESG concern.”