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Institutions commit $10bn to climate change

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  • Institutions commit $10bn to climate change

GLOBAL - A coalition of over 40 European and US institutional investors, with combined assets under management of $1.75trn, have launched a climate change action plan, including a $10bn investment.

The action plan, unveiled yesterday at the Investors Summit on Climate Risk, hosted by Ceres and the United Nations Foundations in New York, is designed to boost investments in energy efficiency and clean energy technologies, according to F&C, the latest investor to add its name to the group,

The plan will also "require tougher scrutiny about carbon intensive investments that may pose long-term financial risks."

Investors state climate change presents both material risks and significant opportunities and set out nine goals including policy actions aimed at the US Securities and Exchange Commission (SEC) and Congress, engagement with companies to improve their disclosure and responses to climate change, as well as the minimisation of climate investment risks.

Moreover, investor commitments will also include deploying $10bn collectively over the next two years.

The collective aims for a 20% reduction in energy used in core real estate investment holdings over a three-year period and consider green building standards in making investment decisions.

It will require and validate investment managers' report on how they are assessing climate risks in their portfolios, whether from new carbon-reducing regulations, physical impacts or competitive risks.

It is hoped the new plan will also encourage analysts and rating agencies to analyse and report on the potential impacts of long-term carbon costs, particularly on carbon-intensive investments such as new coal-fired power plants, oil shale, tar sands and coal-to-liquid projects.

Significantly, the collective wants to push the US Congress for a mandatory national policy to reduce national greenhouse gas emissions in accordance with the 60-90% reductions below 1990 levels by 2050 which scientists suggest is urgently needed to avoid the worst and most costly impacts from climate change.

Some of the institutions included in the strategy are the California Public Employees' Retirement System (CalPERS), California State Teachers' Retirement System (CalSTRS), State Street and Deutsche Bank Asset Management.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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