Norway’s main municipal pensions provider KLP said that while more people should demand their investments are Paris-compliant, the financial sector depends entirely on politicians acting to make climate a prerequisite for business profitability.

Represented at COP27 in Egypt this week, the NOK720.8bn (€70.2bn) firm touted the potential of public-private partnerships in tackling the climate crisis, putting the onus on governments to find finance solutions to contribute to reaching the 1.5°C target.

Heidi Finskas, vice president of sustainability at KLP, said: “KLP is participating to show that we, as a financial player, stand by the obligations of the Paris Agreement, and that we are doing our part to contribute to the world reaching the 1.5°C target”.

She said it was important that more people in the financial industry demanded their investments complied with the Paris Agreement, but that the responsibility could not lie solely on the shoulders of financial players.

“We are completely dependent on politicians making arrangements for climate considerations to become an important prerequisite for business profitability,” Finskas said in a statement on KLP’s website.

Solving the climate problem required international and national authorities to continue to increase their targets, and for these promises to translate into concrete climate policy, she said.

One of the events KLP was participating in at COP27 was a discussion about how to increase investments for the green transition, she said.

“There is great potential for more interaction between public and private capital,” Finskas said, adding that KLP has good experience of this through its investments in renewable energy in developing countries.

“Massive investments are needed to finance solutions that can contribute to us reaching the 1.5°C target,” she said. Institutional and public investors could really influence the transition, she added, with a combined ownership stake of over 50% of global stock markets.

KLP said the more capital that made demands for emission cuts in business, the greater the effect would be.

“For us, climate is a financial risk factor that should be limited,” the sustainability chief said.

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