Responsible Investors Are Taking Action on Climate Change

A new investor platform was recently released in Paris by Ceres, a nonprofit organization that advocates for sustainability leadership. The Investor Platform for Climate Actions explores climate actions and commitments made by investors around the world. 

The initiative is a joint project of the Institutional Investors Group on Climate Change (IGCC) in Europe, Ceres’ Investor Network on Climate Risk (INCR) in North America, IGCC in Australia/New Zealand, the Association for Sustainable and Responsible Investment in Asia (ASrIA), the Asia Investor Group on Climate Change (AIGCC), Principles for Responsible Investment, the Carbon Disclosure Project (CDP) and the U.N.

Environment Programme Finance Initiative (UNEP FI).

The new platform covers measurement, engagement, and reallocation to showcase a broad range of investor activity. Measurement activities include carbon footprinting of investor portfolios, while reallocation focuses on investment in low-carbon assets and shifting capital to less intensive activities. Engagement with fossil fuel companies and energy-intensive businesses is also taking place. For the first time, information on the climate actions undertaken by more than 400 investors is being made publicly available via the online platform. The tool highlights 17 initiatives spanning 30 nations and involving more than US$25 trillion in investments and commitments.

According to Jessica Robinson, Chief Executive of ASrIA-AIGCC, “investors are taking significant action to support the transition to a low carbon and clean energy future. In Asia, this transition requires a radical change in how we define and drive growth, and understanding the role that investors play in achieving this is an important part of the solution.

 The platform provides a unique tool for sharing knowledge and experience across the industry, something that can provide invaluable support to Asia-based investors as the region shifts its growth models.”

Many organizations, such as the Sustainable Food Trust and the Lexicon of Sustainability, are working on True Cost Accounting (TCA), a method of accounting for externalized health and environmental costs associated with agricultural production.

The true costs of climate change to agriculture can include costs associated with adaptation in the developing world, which increase over time, necessitating faster climate finance. The platform’s focus on measurement, including carbon footprinting, could provide resources to researchers and policymakers engaged in TCA analyses.

The platform also enables the identification and recording of actions not falling within the three primary action areas, such as policy advocacy. Investors hope to highlight the wide range of initiatives already underway globally, and advocate for an ambitious global deal on climate change in Paris in December 2015. Stephanie Pfeifer, Chief Executive of IIGCC, says, “an ambitious global deal which sets a clear pathway towards a low carbon future would enable [investors] to scale up these actions and go further.” Many of the investors and organizations will attend the Sustainable Innovation Forum in Paris, which will take place December 7-8, 2015 during the Twenty-first Session of the Conference of the Parties (COP21).

One of the largest climate conferences ever organized, the meeting will bring together more than 40,000 participants, observers, and civil society members.  

Investors are joining ranks with these nonprofit organizations and public sector entities, as can be seen through the online platform. “2015 is a critical year for the challenge of climate change. Institutional investors have not one, but two important roles to play,” says Eric Usher, acting Head of UNEP FI. “First, they need to amplify their call for serious and ambitious government action on climate change. But, to be credible, they also need to demonstrate their own leadership in moving to action, for instance through the Portfolio Decarbonization Coalition which is part of the broader platform we are launching today."

According to Fiona Reynolds, Managing Director of PRI, “investors are looking for ways to use their financial muscle to effect action on climate change.  By seeing the wide range of options available via the database, investors will be able to ramp up their climate activities ahead of COP21 in December.” In September of 2014, more than 360 investors managing more than US$24 trillion called for a strong global climate deal. Chris Davis, Chief of Staff for Ceres' INCR, says “investors around the world spoke loud and clear in September that there is strong ambition to finance the Clean Trillion - the additional trillion dollars per year that must be invested in clean energy in order to prevent the worst impacts of climate change. The steps many investors are taking today—as illustrated on this platform—can be scaled up tremendously in the future with a strong global climate deal in place."

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