Investment community calls for predictable climate policy

Investor groups representing more than $22.5 trillion in assets are calling for more decisive action to slow down climate change and its negative effect on world economies.

They seek an active role in shaping the solutions and are forming an organization called the Global Investor Coalition on Climate Change (GIC) to represent the investment community on climate change policy and investment issues.

“Strong carbon-reducing government policies are an urgent imperative. Hurricane Sandy, which caused more than $50 billion in economic losses, is typical of what we can expect if no action is taken and warming trends continue," says Chris Davis, director of investor programs at Ceres and the North American Investor Network on Climate Risk (INCR). "Investors are rightly concerned about the short and long-term economic risks of climate change and understand that ambitious climate and clean energy policies are urgently needed to avoid catastrophic impact.”

More consistency needed 

Their agenda is outlined in an open letter addressed to leaders of the world's largest economies. It was published in mid-November, just days before the latest round of international climate negotiations began in Doha, Qatar.

The letter calls for several things, including consistent and predictable policies that encourage low-carbon investment, better knowledge sharing between governments to accelerate implementation of successful climate and clean energy initiatives, and stronger international agreements that send clearer signals to markets about climate policy and planned greenhouse gas (GHG) emissions reductions.

The investors write:

"Despite the evident policy progress in some countries, extreme weather events are already increasing in frequency with often disruptive effects on communities, local economies, companies and investments. Current policies are insufficient to avert serious and dangerous impacts from climate change. Further delay in implementing adequately ambitious climate and clean energy policy will increase investment risk for institutional investors and jeopardize the investments and retirement savings of millions of citizens."

The letter was co-authored by INCR, the European Institutional Investors Group on Climate Change (IIGCC), the Australia/New Zealand Investor Group on Climate Change (IGCC), the Asia Investor Group on Climate Change (AIGCC) and the United Nations Environment Programme Finance Initiative (UNEP FI). It is also supported by the UN-backed Principles for Responsible Investment Initiative (PRI).

Shaping the dialogue 

Four of the regional groups that signed the letter -- IIGC, INCR, IGCC and AIGCC -- are collaborating on the new global organization, which will seek a high-profile role in climate change discussions.

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