The world has seen a lot of political turmoil in the last year with the swearing in of Donald Trump, BREXIT, Teresa May's disastrous poll performance, the Qatar & GCC crises, etc. All this was taking the attention away from real issues like climate change that every nation is facing. While it may be business as usual for the seasoned politicians of the world, the private sector companies are ensuring that they do not ignore climate issues, and is becoming a focus as the leaders of the G20 nations meet, as we speak, in Germany for their annual summit.
389 global investors who together manage more than $22 trillion in assets have written to G20 leaders attending the G20 summit on the 7th and 8th July 2017, urging them to commit to the Paris Agreement. Countries like the United Sates can expect some hard questions coming their way on the reasons for their withdrawal from the Paris agreement. It is speculated that Germany's Chancellor Angela Merkel will challenge US President Donald Trump on his decision.
It is important for the planet that the G20 nations lead the way on climate change mitigation and action, which is why global investors are urging the leaders to commit to fulfilling the terms of the Paris Climate Agreement. This letter is actually a follow-up to a first letter which was sent earlier this year to leaders of the G7 nations, by over 200 investors managing $15 trillion. The letter has since gained more signatories, and now sees a total of 389 investors managing $22 trillion.
Here is what this group had to say to the G20 leaders; As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments. We urge all nations to stand by their commitments to the Agreement and to put in place policy measures to achieve their nationally-determined contributions (NDCs) with the utmost urgency. In addition, we ask governments to develop focused and targeted long-term climate plans by which their NDCs become aligned with the Paris Agreement's goal of holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.
“The G20 must move swiftly to put in place the frameworks required to improve the availability, reliability and comparability of climate-related information, and to ensure carbon pricing signals which will drive the incorporation of climate risks and opportunities into financial assessments,” said Paul Simpson, CEO of CDP, formerly the Carbon Disclosure Project, who participated in coordinating the letter. “That is why investors are calling on G20 leaders to prioritise rulemaking by national financial regulators to require disclosure of 'material' climate risks in line with the recent recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosure (TCFD).”
“Investors are sending a powerful signal today that climate change action must be an urgent priority in the G20 countries, especially the United States,” said Mindy Lubber, CEO and president of the sustainability nonprofit organisation Ceres, which directs the Ceres Investor Network on Climate Risk and Sustainability, which was also partly responsible for coordinating the letter. “Global investors are eager to open their wallets to a low-carbon future, but it won’t happen without clear, stable policy signals from countries worldwide - in particular the U.S., whose withdrawal from the Paris Climate Agreement is hugely troubling.”
This serious effort by these global investors is significant beyond their statement to the G20 leaders. It is a statement they are making to all corporations around the world, to factor in climate change realities into their business plans. No CFO of companies should ignore climate change issues. If they do, they will be dubbed ignorant, and the market will judge them over time. In the meantime, power to these 389 investors, for their efforts, that is unprecedented. The planet is grateful to them!
