U.S. and European institutional investors pledged at a U.N. summit yesterday to invest $10 billion in clean technology over the next two years. In addition to investing in renewable energy sources, like solar and wind power, the investors also agreed to incorporate green building–such as LEED (Leadership in Energy Efficiency and Design) and Energy Star–into their investment decisions.
Nearly 50 leading U.S. and European institutional investors managing over $1.75 trillion in assets signed a climate change action plan to boost investments in energy efficiency and clean energy technologies and require tougher scrutiny of carbon-intensive investments that may pose long-term financial risks. Additionally, European investors managing $6.5 trillion in assets supported the action plan "in principle."
The action plan was announced at the Investor Summit on Climate Risk, hosted by Ceres and the United Nations Foundation, attended by more than 450 investor, financial and corporate leaders from around the world. Signatories to the action plan include state treasurers, controllers, pension fund leaders, asset managers and foundations from London, California, Florida, New York, Connecticut, North Carolina, Pennsylvania and a dozen other states.
"Our goal is to transform the world economy into one that is clean, green and sustainable," said California State Treasurer Bill Lockyer, one of the 49 signatories, who serves on the board of the leading pension funds, CalPERS and CalSTRS, which collectively manage more than $500 billion in assets. He added that California’s public pension funds are actively pressing the corporate world to fully assess and disclose the risks and opportunities climate change presents for their business operations.
Florida Chief Financial Officer Alex Sink said, "Florida is on board as the first State Treasury in the nation to require fund managers to disclose how they incorporate climate risk into prudent investment management."
Calling energy efficiency "one of the fastest, easiest and cheapest ways to significantly reduce emissions and improve the bottom line," the investor group pledged to reduce energy use in core real estate holdings by 20% over the next three years.
The action plan calls for a series of specific steps by investors to address the growing risks and opportunities from climate change. Nine goals of the plan include engagement with companies to improve their disclosure and responses to climate change, minimizing climate investment risks and maximizing climate-related investment opportunities.
In addition signatories of the action plan pledged to push the SEC to issue guidance leading to full corporate disclosure of climate risks and opportunities, and to push Congress for a mandatory national policy to reduce national greenhouse gas emissions 60-90% below 1990 levels by 2050.
"This action plan reflects the many investment opportunities that exist today to put a dent in global warming pollution, build profits and benefit the global economy," said Mindy S. Lubber, president of the Ceres investor coalition and director of the Investor Network on Climate Risk (INCR).
"Energy efficiency provides the biggest opportunity for helping developed and developing countries alike," said Timothy Wirth, president of the United Nations Foundation. "Investors have a critical role in helping drive this new energy economy forward. Their commitments here today are groundbreaking and will not only reduce the devastating impacts of climate change but will help grow the global economy at the same time."
The summit comes as worldwide investor attention on climate change dramatically increases. In the last two years, investor and asset manager participation in the Investor Network on Climate Risk has more than doubled, to more than 60 institutional investors and with collective assets totaling $4.5 trillion.
The climate risk summit was hosted and organized by the United Nations Foundation, the United Nations Fund for International Partnerships and Ceres, which directs the Investor Network on Climate Risk. Ceres is a U.S. coalition of investor and environmental leaders that has spearheaded national and international investor activity on climate risk issues.
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