$29 Trillion Investor Coalition Urges Government Policies Including Mandatory Climate Reporting, Sectoral Transition Strategies
A group of more than 530 financial institutions representing over $29 trillion in assets under management announced the release of the 2024 Global Investor Statement to Governments on the Climate Crisis, calling on governments globally to set policies aimed at unlocking private capital flows to enable the net zero transition, including mandatory climate-related reporting and the implementation of transition strategies to decarbonize high-emitting sectors.
Released ahead of Climate Week NYC and the upcoming COP29 climate conference, the new statement was coordinated by the founding partners of climate-focused investor network The Investor Agenda, including the 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 statement notes that while investors are taking a wide range of actions to address climate and nature-related risks in their portfolios and to pursue net zero transition-related opportunities, critical policies are still required to enable private financial flows to facilitate the transition, stating:
“To make this transition effectively and at the rate and scale necessary, markets must be conducive to private sector investment with the appropriate legal, policy, and regulatory conditions.”
The statement also acknowledges the policy progress made over the past few years, highlighting in particular the U.S.’ Inflation Reduction Act and the EU’s Fit-for-55, which has accelerated investment in global clean energy to $1.8 trillion in 2023, but notes that this still falls short of the estimated $4.8 trillion annually required to reach net zero emissions by 2050, and adds that policies to date have focused primarily on developed markets, while emerging markets and developing economies (EMDEs) are still facing significant underinvestment.
The investor statement sets out a series of key “Asks of Governments,” calling for key actions including enacting economy-wide public policies such as submitting 2030 and 2035 targets by 2025 that are aligned with limiting global temperature rise to 1.5°C, and implementing carbon pricing mechanisms; implementing sectoral transition strategies, especially in high-emitting sectors, including removing fossil fuel subsidies and replacing them with clean energy subsidies; addressing nature, water and biodiversity-related challenges contributing to and stemming from the climate crisis; mandating climate-related disclosures for companies and financial institutions, including climate transition plans and mandatory climate risk disclosure in financial reporting consistent with the ISSB standards, and; mobilizing private investment into climate mitigation, resilience and adaptation activities in EMDEs.
In the statement, the investors said:
“A whole-of-government approach is essential to unlocking the public and private capital flows needed for the net zero transition. As investors and financial institutions, we are committed to working with policymakers to deliver this approach in order to drive collective prosperity and sustainable economic growth while achieving our shared climate and nature goals in a way that maximises the benefits for people and nature.”
Click here to access the investor statement.