Global investors team up on climate change

A statement calling for new policies to help encourage the private sector to invest in climate change has been signed by 259 investment managers globally, including 33 Australian institutions.

In the absence of strong and stable policy frameworks, many low-carbon investment opportunities do not currently meet investors’ fiduciary duty obligations, according to the statement.

“Private investment will only flow at the scale and pace necessary if it is supported by clear, credible, and long-term policy frameworks that shift the risk/reward balance in favour of less carbon-intensive investment,” the statement read.

The statement called for domestic policy frameworks to encourage renewable energy, energy efficiency, and other low carbon infrastructure in order to provide investors with confidence that they could receive long-term risk-adjusted returns.

The statement also called for an international agreement on climate funding and the reduction of deforestation — along with measurement, reporting and verification to set global rules, bolster investor confidence and allow financing to flow.

International finance tools could also help mitigate the high levels of risk private investors face in making climate related investments in developing countries, enabling dramatic increases in private investment.

Large global signatories to the statement included Allianz, HSBC Global Asset Management and Societe Generale. Australian investors included AMP Capital Investors, CommInsure, BT and major industry super funds such as AustralianSuper and HESTA.