10.27.2021

The Investor Agenda Calls for End of Fossil Fuel Subsidies

A record 733 institutional investors from around the world, with more than US$52 trillion in assets under management, have signed an ambitious statement to governments ahead of COP26, calling for a number of measures that would help avoid catastrophic temperature rise and manage climate risk. These include measures to end fossil fuel subsidies, phase out thermal coal-based electricity, and mandate climate risk disclosure.

The 2021 Global Investor Statement to Governments on the Climate Crisis was officially launched today, after public announcements in June and September with investor signatories managing US$41 trillion in assets, and US$46 trillion, respectively. The US$52 trillion in managed assets announced today represents more than half of all managed assets globally, and is the largest-ever collective assets under management to sign on to such a statement.

Signatories include some of the world’s largest investors, including State Street Global Advisors, PIMCO, AMUNDI, Legal & General Investment Management, Franklin Templeton Investments, UBS Asset Management, Aegon NX, Insight Investment AXA Investment Managers, DWS Group, Schroders, Sumitomo Mitsui Trust Asset Management, Aberdeen Standard Investments, AllianceBernstein, Fidelity International, Aviva Plc, BNP Paribas Asset Management, MFS Investment Management, and Allianz Global Investors.

The investors argue that the right policies would unlock the trillions of dollars of investment needed in solutions to the climate crisis. This includes policy signals in line with efforts to limit temperature rise to no more than 1.5-degrees Celsius, including significantly stronger 2030 nationally determined contributions (NDCs), credible commitments to net-zero greenhouse gas emissions by mid-century, and the development of just transition plans for affected workers and communities. It also calls on governments to avoid public investment in new carbon-intensive infrastructure in their COVID-19 economic recovery plans.

“Our ability to properly allocate the trillions of dollars needed to support the net-zero transition is limited by the ambition gap between current government commitments (as set out in NDCs) and the emissions reductions needed to limit global average temperature rise to 1.5-degrees Celsius,” the statement reads.

The statement also evidences the overwhelming investor support for mandatory climate risk disclosure in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

“As owners of (or those representing owners of) companies, we need access to adequate information on how these companies are assessing and managing the risks and opportunities presented by climate change,” the investors write.

Debby Blakey, CEO of HESTA superannuation industry fund in Australia, said: “Global investors are increasingly focusing on identifying the enormous opportunities arising from the need to transition our economy for a low carbon future. Countries risk missing out on this wave of investment capital if they don’t get the policy settings right.”

Hiroshi Ozeki, President and Chief Executive Officer of Nissay Asset Management, said: “As all the skies and all the oceans on this Earth are common and connected, this is a matter of cooperation with our neighbors in order to keep our precious planet safe and sound for our future generations. With more participants having the same goal and aspirations, we’ll bring about better results. We are committed to fulfilling our role as an asset manager to contribute to build a sustainable future by carrying out our Net Zero initiative, including continued collaboration with policy makers.”

Michelle Dunstan, Chief Responsibility Officer of AllianceBernstein, said: “AllianceBernstein is fully invested in addressing climate change. Through signing this statement, we are engaging collaboratively with other investors to advocate for government action on the key areas of climate policy and to encourage investment in climate resilience.”

COP26 is an opportunity for governments to raise their ambition and commit to the policies needed to enable large scale zero-emissions, climate-resilient investment. A climate policy report card released by AIGCC, Ceres and IGCC found that most G20 countries do not have the policy settings in place to attract this investment. These countries risk missing out on the enormous investment opportunities in tackling the climate crisis.

Source: The Investor Agenda

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