UK minister calls on P8 to invest in low carbon services
UK/GLOBAL - The 'P8 Group' of public pension funds has been urged by the UK government to cooperate with governments and development banks to help finance low carbon infrastructure and technologies.
Speaking at the fourth summit of the P8 Group in London, Gareth Thomas, international development minister, said: "Between your institutions, you steward in excess of $3trn (€2trn). If some of that financing could be used for climate mitigation and adaptation investments, you could transform the planet's future."
The P8 Group is a joint initiative from the University of Cambridge Programme for Sustainability Leadership (CPSL) and The Prince of Wales's Business and Environment Programme (BEP), to bring together public pension funds from all over the world and encourage actions relating to global issues, and climate change in particular.
Pension funds and organisations that have so far been involved in the P8 summits include European schemes such as Sjunde AP-Fonden (AP7), APG, the Universities Superannuation Scheme (USS), alongside US public pension funds CalPERS and CalSTRS and funds from Australia and Korea.
In his keynote address to the summit, Thomas argued the move was "not about corporate philanthropy, but rather about taking advantage of the new low carbon market opportunities and investing in sustainable technologies of the future".
To try and create incentives for more private sector investment in this area, Thomas suggested a focus on three elements:
The Department for International Development (DFID) said a number of proposals for potential public financing mechanisms are emerging, including the launch of cornerstone funds. These would use initial financing from major institutional investors, such as pension funds, and then leverage further finance to invest in low carbon energy and technology, as well as low carbon sectors in developing countries.
But Thomas warned: "We will not be able to develop them without your expertise and cooperation. Together, institutional investors, multilateral banks and governments can take advantage of the new investment opportunities in low carbon growth and support a 21st Century green revolution."
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