The statement on the "urgent need for global agreement on climate change" signed by 181 investors, who collectively manage more than €8 trillion in assets worldwide, was made public at the International Investor Forum on Climate Change in New York (US) hosted by New York State Comptroller Thomas DiNapoli and keynoted by British economist Lord Nicholas Stern.
"Unmitigated climate change poses a threat to the global economy," said Stern. "But building a low carbon economy creates opportunities for investment in new technologies that promise to transform our society in the same way as the introduction of electricity or railways did in the past."
Investors are already starting to invest in a low-carbon world that is "cleaner, quieter, safer and more biodiverse," said Stern, who chairs the Grantham Research Institute on Climate Change at the London School of Economics and serves as special advisor to the group chairman of HSBC on economic development and climate change, "but these investments will be much more effective if the right climate policies are in place. Investments will drive the political process."
Building a low-carbon world to reduce climate change is an enormous investment opportunity, all forum speakers agreed, but the right policies must be put in place with a strong agreement at Copenhagen that will lead to a price on carbon emissions that discourages emitters from using the atmosphere as a waste disposal facility. "We must chart a new course toward long-term, sustainable business practices," said DiNapoli, who heads the €79 billion New York State Common Retirement Fund and its €341 million green strategic investment program. "We cannot drag our feet on the issue of global climate change. I am deeply concerned about the investor risks climate change presents, and the human cost of inaction is unthinkable."
DiNapoli added that investors are "convinced" that with a strong climate agreement in place there will be "significant opportunities for global growth."
"Investors have a crucial role to play in building a low-carbon, energy efficient global economy," said Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, which co-convened today's forum. "But without strong policies that encourage clean technologies and discourage high-polluting technologies, their hands are tied."
The investors' statement calls for a climate change treaty that sets a global target for emissions reductions of 50 to 85% by 2050 compared with a 1990 baseline. This goal, first proposed by thousands of climate scientists with the Nobel-Prize winning Intergovernmental Panel on Climate Change against a 2000 baseline, would require emissions to stop increasing by about 2015. With that level of reductions, the average warming worldwide could be limited to about two degrees Celsius (3.6 degrees Fahrenheit) by the year 2100, the warming level that could avert the worst consequences of climate change.
For developed countries, the investors want emissions reduction targets of 80 to 95% by 2050, with interim targets of 25 to 40% by 2020, backed up by effective national action plans. For developing countries, the investors' statement calls for national action plans that deliver "measurable and verifiable emission reductions."
Support for adaptation to unavoidable climate change impacts
In their statement, the investors said, "We recognise that the physical impacts from climate change will have far-reaching consequences, such as rising costs of insurance and scarcity of key resources, including water scarcity risks. At present, both government and private sector investment in adaptation is inadequate across the globe. A global agreement should provide support for action at regional and national levels to better predict, prepare for and respond to the physical impacts of climate change".
Rob Lake of the Netherlands who represents APG Investments and the European Institutional Investors Group on Climate Change, IIGCC, said, "The single most important thing that will drive investors are long, loud and legal signals from governments."
The Investor Forum was sponsored by the New York State Comptroller, Ceres, the European Institutional Investors Group on Climate Change, the Investors Group on Climate Change Australia/New Zealand, the P8 Group, and UNEP Financial Initiative.
The full statement can be viewed here:
2009 Investor Statement on the Urgent Need for a Global Agreement on Climate Change
