GLOBAL INVESTOR STATEMENT ASKS FOR CLIMATE-RELATED FINANCIAL REPORTING TO BE MANDATORY

Over 450 investors managing more than US$41 trillion in assets released a new joint statement to all world governments urging a global race-to-the-top on climate policy

We are pleased to share this relevant piece of news which goes in the right direction for the knowledge and acceptance of ESG as a “must” and as a “key success factor”

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The 2021 Global Investor Statement to Governments on the Climate Crisis delivers the strongest-ever investor call for governments to raise their climate ambition and implement meaningful policies, or risk missing out on a massive wave of investment in tackling the climate crisis. In particular, the 2021 statement asks for climate-related financial reporting to not only be improved, but be mandatory, and clearly recognizes the “climate crisis”. It also reflects the devastating impacts of the COVID-19 pandemic, and calls for resilient economic recovery plans that support the just transition to a net-zero emissions future that is underway.

Developed by the seven founding partners of The Investor Agenda, the statement reads:

“…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…Full implementation of the Paris Agreement will create significant investment opportunities in clean technologies, green infrastructure and other assets, products and services needed in this new economy.” 

The initial signatories to the 2021 Global Investor Statement have been released ahead of the G7 Summit to encourage further investor advocacy for ambitious climate policy action ahead of the 26th United Nations Climate Conference of the Parties (COP26) in November. The statement will remain open for further institutional investors to sign until COP26 and will be periodically updated with new signatories at key moments throughout 2021.

Signatories to date include some of the world’s largest institutional investors and asset managers (see full list here). The combined assets under management of the 457 signatories is more than US$41 trillion, representing an estimated 37 percent of all global assets under management. This includes 51 signatory investors each managing over $200 billion in assets. It comes as the largest asset managers and asset owners are increasingly pledging to achieve net-zero emissions across their portfolios by 2050 or sooner and set interim emissions reduction targets. 

The investor signatories call on all governments to undertake five priority actions before COP26 in November:

1. Strengthen their Nationally Determined Contributions (NDCs) for 2030 in line with limiting warming to 1.5°C;
2. Commit to a domestic mid-century, net-zero emissions target and outline a pathway with ambitious interim targets including clear decarbonization roadmaps for each carbon-intensive sector;
3. Implement domestic policies to deliver these targets, incentivise private investments in zero-emissions solutions and ensure ambitious pre-2030 action; including: “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°C 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.”
4. Ensure COVID-19 economic recovery plans support the transition to net-zero emissions and enhance resilience; and
5. Commit to implementing mandatory climate risk disclosure requirements aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Many nations already have or have vowed to improve their climate policies, including 2030 emissions reduction targets, through updated NDCs ahead of COP26. However, significant climate policy and finance gaps remain in almost all nations, and the world is currently not on a trajectory to meet the objectives of the Paris Agreement, underscoring the need for further ambition.

Signing the Global Investor Statement to Governments on the Climate Crisis is an action item in the policy advocacy focus area of The Investor Agenda. Launched in 2018 by seven founding partners –– Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative –– The Investor Agenda provides a common leadership agenda on the climate crisis for investors that is unifying, comprehensive, and focused on accelerating investor action for a net-zero emissions economy.

The founding partners of The Investor Agenda are calling on all institutional investors that support increased government ambition on the climate crisis to sign on to the statement via the Investor Agenda website, and are also encouraging investors worldwide to commit to developing comprehensive investor climate action plans (ICAPs) and to aligning their investments with the goal of net-zero emissions by 2050 or sooner, with credible interim targets, among other actions.  

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Supporting quotes from investors:

Michelle Scrimgeour, Chief Executive Officer, Legal & General Investment Management and co-chair of the UK Government’s COP26 Business Leaders Group, said: “Climate change is one of the greatest systemic risks we face today and achieving net-zero by 2050 will be crucial to help steer the world towards a more sustainable future. We will need to see substantial change across industry and society globally to achieve this goal.  As long term investors we play a pivotal role,  not only in decarbonising investment products on behalf of our clients but also influencing the real economy transition by engaging with and holding businesses accountable on their net-zero transition plans.

Fidelity International Global Head of Stewardship and Sustainable Investing, Jenn-Hui Tan, said: “Climate change is amongst the most pressing threats facing our planet and inevitably poses significant risks to the long-term profitability and sustainability of companies. At Fidelity International, we recognise that now more than ever, we must collaborate and work together as an industry to find the best path to net-zero as fast as possible. Our message is clear; the climate crisis must not and cannot be ignored.”

State Street Global Advisors Global Chief Investment Officer, Lori Heinel, said: “We are committed to engaging with companies not just on the goal of reaching net-zero, but on how they will get there. The push to net-zero is both urgent and necessary, and equally important is understanding the transition pathways companies will choose to achieve the commitment and deliver value for investors over the long term.”

The complete text of the 2021 Global Investor Statement to Governments on the Climate Crisis, including the names of the initial 457 investor signatories managing $41 trillion in assets, is available on The Investor Agenda website here.

About The Investor Agenda

The Investor Agenda is a common leadership agenda on the climate crisis that is unifying, comprehensive, and focused on accelerating investor action for a net-zero emissions economy. The founding partners of The Investor Agenda are seven major groups working with investors: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative.

Find out more

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