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June 20, 2013
Investor Coalition Holds First Global Forum on Climate Change
by Robert Kropp
The Global Investor Coalition on Climate Change, a network of four regional climate change investor
groups, holds its first meeting in Hong Kong and launches an action plan to facilitate low-carbon
investment.
SocialFunds.com --
Underscoring the urgency of meaningful action on climate change are the most recent findings of the
International Energy Agency. IEA's Executive Director, Maria van der Hoeven, summarized them in a
recent Huffington Post article.
“The current level of carbon intensity is not consistent
with the stated goal of limiting the rise in global temperatures to 2 degrees C,” van der Hoeven
wrote. “On the contrary: Were we to continue to emit the same level of carbon dioxide for every
unit of energy produced for the next several decades and energy demand were to continue to grow
unabated, our planet would be on track to warm by well over 4 degrees C, with potentially
devastating impacts.”
A recently formed global network of
climate change investor groups, with assets under management in excess of $20 trillion, met for the
first time in Hong Kong last week to address the question of what institutional investors can do to
combat climate change in the absence of government policy. The Global Investor Coalition on Climate Change (GIC)
consists at present of four major regional investor groups, including the US-based Investor Network on Climate Risk
(INCR).
The European Institutional Investors Group on Climate Change (IIGCC), the
Australia/New Zealand Investor Group on Climate Change (IGCC), and the Asia Investor Group on
Climate Change (AIGCC) aare also members of the Coalition.
In advance of the First Global Investor Forum on Climate
Change, Christopher Davis of Ceres and INCR
said, “The implications for the global economy are enormous and that’s why major institutional
investors are committed to take action. But it will take clear market signals from policy makers,
such as limits or taxes on greenhouse gas emissions, to ensure the flow of investment capital
towards climate solutions is adequate to meet the challenge.”
Among the topics discussed
at the Forum were financing initiatives for energy efficiency measures and the potential for
renewable energy technologies in emerging markets.
Given the lack of adequate policy
signals on climate change, an especially interesting initiative unveiled at the Forum is the
establishment of a Low Carbon Investment Registry. The Registry is designed to provide case
studies in low carbon investment opportunities, thereby encouraging the sharing of information on
the issue among investors. The Registry is expected to launch in early 2014.
“The Registry
demonstrates the international collaboration on climate issues, between investors in developed and
emerging markets and between public and private sector funds,” the Coalition stated in a press
release.
“We encourage investors to use this tool to send a clear message that the
importance of increasing capital allocations to low carbon assets is both understood and underway,”
the Coalition continued. “Better communicating low carbon investment successes will encourage
governments to provide the stronger policy signals that investors need to increase their low carbon
capital allocations.”
The GIC also released an Action Plan on Climate
Change at the Forum, which covers the years 2013-15. Signatories to the Plan commit to the
following actions:
Support and coordinate the international work of investors on climate
change;
support members in integrating climate change into investment practice;
build
investor capacity on low carbon investing;
improve engagement with companies on their approach
to climate change; and
work with governments to improve climate related policy.
Plans
for working with governments include:
• An international framework that sets clear targets for
greenhouse gas (GHG) emissions
reductions for the short, medium and long term, and that
provides the necessary
mechanisms and institutions to achieve the targets;
• improved
policies on carbon regulation and pricing, fossil fuel subsidies and
regulatory barriers to
dissemination of clean technologies;
• the development of policies that provide appropriate
incentives and investment
certainty to facilitate financing of renewable energy, energy
efficiency, adaptation and
climate resilience at scale; and
• the development of effective
bilateral and multilateral support mechanisms for low
carbon investments, for example the
Green Climate Fund.
Despite the lack of concrete government action, several speakers at
the Forum noted that “investors are used to dealing with uncertainty, as this is the very nature of
the investment business,” according to the press release. “Therefore, despite insufficient policy
support and continuing economic difficulties in many countries arising from the credit crunch,
investors and financial institutions are moving to support low carbon developments and improving
their ability to manage climate change within regular investment analysis.”
©
SRI World Group, Inc. All Rights Reserved.
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