Seven major investor groups have produced a report intended to help policymakers design effective climate policy capable of unlocking investor capital.

Written on behalf of the seven founding partners of The Investor Agenda, which include the Institutional Investors Group on Climate Change (IIGCC) and the United Nation’s Principles for Responsible Investment (PRI), the report identifies eight key features of good climate policy.

These must be respected to help make an “urgent course correction”, according to the report. Released today, the UN’s Framework Convention on Climate Change (FCCC) ‘Synthesis report on the technical dialogue of the first global stocktake’ shows that the world is far from limiting global temperature rise to 1.5°C above pre-industrial levels.

The report noted: “The window to keep limiting warming to 1.5 °C within reach is closing rapidly, and progress is still inadequate based on the best available science. Global emissions to date are not in line with modelled global mitigation pathways consistent with the global temperature goal of the Paris Agreement nor are they aligned with longer-term emission reduction goals.”

It added: “Much more action and support are needed to make urgent progress on the long-term goals set in the Paris Agreement.”

The Investor Agenda’s report is a break from its usual pattern of coordinating Global Investor Statements (GIS) calling for greater action from governments on climate change. This is in response to climate change moving from the margins to the mainstream of public policy.

“This year, the partners have taken a step back from the GIS to identify the key features of climate policy and what investors require to ensure they deliver on the objectives of the Paris Agreement,” said a spokesperson for The Investor Agenda.

“This will inform how the Investor Agenda scales its policy actions over the next years.”

The eight key features of effective climate policy identified in the report include: clear commitments to action; being ‘comprehensive and at-scale’, and sector-specific policies.

Under the heading of ‘comprehensive and at-scale’, the report authors note that comprehensive policies must also be complementary in two regards.

One of these is in relation to sustainable finance policies, which the report authors say should be “integrated with the real economy and not treated as a stand-alone exercise”.

“Second, policies should support and reinforce each other, and not conflict with each other; a common example of the latter are fossil fuel subsidies (which weaken the case for low carbon investments),” they wrote.

Stephanie Pfeifer, chief executive officer of the IIGCC, said: “While investors have an integral role to play in facilitating the transition of the global economy, this is largely predicated on policymakers creating a conducive environment and implementing the appropriate policies necessary to catalyse changes in capital allocation and investment at scale.”

David Atkin, CEO of the PRI, added: “Robust and ambitious policy action is needed to support the actions already being undertaken by investors. We’re pleased to support this report, along with our partners through the Investor Agenda, and look forward to continuing to work with investors and policymakers alike to drive further ambition in this hugely important area.”

The latest digital edition of IPE’s magazine is now available