GLOBAL - The Institutional Investors Group on Climate Change (IIGCC) has called upon EU policymakers to work with the institutional investor community to shape policy that encourages the private investment necessary to meet an 80% reduction in greenhouse gas emissions by 2050.

The IIGCC's statement comes in response to the recent publication of the EU's Roadmap to 2050 and Energy Efficiency proposals. 

Ole Beier Sørensen, chairman of the IIGCC and chief of research and strategy at the Danish labour market supplementary pension ATP, said: "While the Roadmap and energy efficiency plan provide greater clarity about the European path toward a low-carbon future, the emissions reduction targets outlined will not be achieved without focused incentives, a high and sustained price on carbon and credible policy frameworks that stimulate private investment.

"According to EU estimates detailed in the Roadmap, additional investment of €270bn will be required annually over the next 40 years to move the world toward a low-carbon economy. Separate estimates have suggested the private sector will need to provide by far the largest share of this capital at around 85%."

Beier Sørensen said it was therefore crucial that policy created incentives for low-carbon investments and that future funding mechanisms were structured to take the commercial realities faced by investors into account.

"In addition, the EU - and in particular its member states - must take more determined steps to meet energy efficiency targets," he said. "The EU must ensure climate and budget policy supports a viable low-carbon growth path, and policymaking bodies must work with the institutional investor community to harness its capital and benefit from its expertise." 

Paul McNamara, chairman of the IIGCC Property Working Group and head of research at real estate asset manager PRUPIM, added: "Although it is pleasing to note policymakers have recognised the necessity of tackling buildings-related emissions to meet this target, increasing the rate of refurbishment on one-eighth of Europe's publicly owned building stock from 1.5% per annum to 3% per annum can only ever make a modest contribution to emissions reduction.

"It is imperative that the opportunity to drive energy efficiency in buildings is not lost and that workable, detailed solutions are promoted, which affect a fundamental shift in the behaviour of the private real estate market."