Angelien Kemna, chief financial and risk officer at €377bn Dutch asset manager APG, has called on the world’s governments to produce “workable and stable” climate policies to increase the pace of institutional investment in sustainable energy.
Speaking on behalf of the Global Investor Coalition on Climate Change (GIC) – representing nearly 350 institutional investors with more than €24trn in assets – at the UN Climate Summit in New York, Kemna said the €194bn currently invested in clean energy worldwide would need to double over the next few years to counter the worst effects of climate change.
To achieve this goal, she said governments should abolish fossil-fuel subsidies, increase the price of CO2 emission rights and boost their support for research in clean-energy generation.
The GIC’s members will now press companies in which they are invested to provide more clarity on the risks posed by climate change.
Kemna also announced that, over the next three years, APG will double its investments in sustainable energy to €2bn.
Further, APG, PensionDanmark and US pension fund CalSTERS have committed themselves to making more than €24bn in combined allocations to green investments by the year 2020.
During her speech, Kemna also confirmed that APG had doubled its sustainably managed property holdings to €11bn over the last two years, claiming that the real estate industry had been responsible for 40% of greenhouse gas emissions worldwide.
Her announcement came just after APG’s main client, the €325bn pension fund ABP, said withdrawing from fossil fuel-related investments for was “unrealistic” at the present time, after a number of environmental lobby groups called on the pension fund to divest.
ABP said, rather than divest, it preferred to increase its holdings in sustainable energy sources, pointing out that sustainable energy sources such as wind or solar power could not yet meet global demand.
It also pointed out that new investments in sustainable energy must also provide “proper returns”, and said it sought investments in “proven technologies of sufficient scale and low risk”, citing land-based wind farms as an example.
“Unfortunately, there are not many projects available meeting these criteria yet,” it said.
A spokesman at APG said the asset manager’s stake in the larger oil companies currently stood at approximately €10bn.
He said APG was unafraid of holding ‘stranded assets’ due to the evolution of stricter environmental regulations worldwide, as well as the fact that “oil and coal will still be needed for a long time”.
In an op-ed in the New York Times last June, Henry ‘Hank’ Paulson, US secretary of the Treasury when the credit bubble burst, warned of the potentially catastrophic implications of climate change for the global economy, if the use of fossil fuels continued at the current level.
At the time, he wrote: “Viewing climate change in terms of risk assessment and risk management makes clear to me that waiting for more information before acting is actually taking a very radical risk.”