Less than a week out from the UN Climate Change Conference (COP26) in Glasgow, a total of 733 institutional investors managing US$52 trillion in assets have signed a statement calling on governments to end fossil fuel subsidies, phase out of thermal coal-based electricity and mandate climate risk disclosure.
The ambitious statement also demands a 45 per cent reduction in emissions from 2010 levels by 2030.
As part of the government’s plan to reach net zero by 2050 announced earlier this week, Australia has committed to reducing its emissions by between 26 and 28 per cent by 2030.
“While we recognise the differentiated responsibilities and respective capabilities of countries, we believe that those who set ambitious targets in line with achieving net zero emissions and implement consistent national climate policies in the short-to-medium term, will become increasingly attractive investment destinations,” the statement reads.
“Countries that fail to do so will find themselves at a competitive disadvantage.”
Australia was recently ranked as one of the least attractive countries for green investing.
“Investors want to seize the enormous investment opportunities worth trillions of dollars that will be created in the transition to net zero,” said Rebecca Mikula-Wright, CEO of the Asia Investor Group on Climate Change and the Investor Group on Climate Change.
“There is a huge opportunity to create new jobs and boost economic growth, but only for those countries that get ahead of the curve. Across Asia, Australia and New Zealand, we call on governments to unite and join the strongest-ever call ahead of COP26 to step up.”
The statement encourages all countries to significantly strengthen their nationally determined contributions for 2030 in line with efforts to limit the global average temperature rise to 1.5-degrees and ensure a planned transition to reach net zero by 2050 or sooner.
According to the statement, governments must take action through “robust carbon pricing, the removal of fossil fuel subsidies by set deadlines, the phase out of thermal coal-based electricity generation by set deadlines in line with credible 1.5-degrees Celsius temperature pathways, the avoidance of new carbon-intensive infrastructure (e.g., no new coal power plants) and the development of just transition plans for affected workers and communities”.
Mandatory climate risk disclosure is also a key focus of the statement, which calls for “consistent, comparable, and decision-useful” disclosure requirements from governments that are aligned with the Task Force on Climate-related Financial Disclosures.
“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 statement reads.
Signatories to the statement include State Street Global Advisors, PIMCO, UBS Asset Management, Fidelity International and BNP Paribas Asset Management.
Industry super fund HESTA, which has called for Australia to become a climate change leader, is also a signatory.
“Global investors are increasingly focusing on identifying the enormous opportunities arising from the need to transition our economy for a low carbon future,” said HESTA CEO Debby Blakey.
“Countries risk missing out on this wave of investment capital if they don’t get the policy settings right.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
