Asset managers call on governments to mandate climate transition plans

Urging governments to strengthen climate policies through disclosure and policies


Natalie Kenway

Investment managers representing $39trn in assets under management have signed a statement calling for governments around the world to raise their climate ambition and enact policies that tackle five priority areas.

Coordinated by the founding partners of the Investor Agenda – Asia Investor Group on Climate ChangeCDPCeresInvestor Group on Climate ChangeInstitutional Investors Group on Climate ChangePrinciples for Responsible Investment and UNEP Finance Initiative, the 533 groups are specifically calling for mandated climate transition plans from corporates, which includes mandatory climate risk disclosure and climate regulation of companies.

A summary of the five priority areas outlined in the 2022 Global Investor Statement to Governments on the Climate Crisis is as follows:

  1. Ensure that the 2030 targets in their Nationally Determined Contributions align with the goal of limiting global temperature rise to 1.5°C. 
  2. Implement domestic policies across the real economy and take early action to ensure that their 2030 greenhouse gas emissions are aligned with the goal of keeping global temperature rise to 1.5°C.
  3. Contribute to the reduction in non-carbon dioxide greenhouse gas emissions and support the effective implementation of the Global Methane Pledge to reduce emissions by at least 30% from 2020 levels by 2030.  
  4. Scale up the provision of climate finance from the public and the private sector for mitigation, and for adaptation and resilience, with a particular focus on the needs of developing countries.  
  5. Strengthen climate disclosures across the financial system.

The groups indicated in the statement the above actions are consistent with a just transition that limits global temperature rises to 1.5°C. The medium- and long-term climate strategies outlined will transition energy away from fossil fuels, end deforestation, bolster climate finance and strengthen disclosures.

In terms of mandatory climate transition plans the statement called for the “public disclosure of 1.5°C pathway-aligned, science-based, independently verifiable climate transition plans for listed and large non-listed companies, asset managers and regulated asset owners”.

“Investors are taking action as it is not only permitted by law but is in many cases required to ensure their ability to generate returns in the long term as a core fiduciary duty and benefit from the opportunities associated with the shift to a net-zero emissions economy. We encourage governments to engage closely with investors to make sure these risks are effectively managed and that these opportunities are fully realised,” the investor statement said.

Principles for Responsible Investment (PRI) CEO, David Atkin, said: “Once again, investors are issuing a clear call to governments on the urgent need for public policy to reflect and support investor action. We know that more ambitious action on climate is needed, a fact compounded by increasing geopolitical tension and the devastation caused by intensifying extreme weather events. Never has the need for a bold, effective and coordinated policy response on climate been more pressing, and we urge governments – on behalf of investors – to heed these calls and take action.” 

Institutional Investors Group on Climate Change (IIGCC) CEO and Investor Agenda Steering Committee member, Stephanie Pfeifer, added: “It will require collaboration and commitments from many stakeholders, but governments and policy makers around the world have the most important role to play in decarbonising the global economy.

“Critically, by setting ambitious net-zero targets that are backed up by supportive and clear domestic policies across the real economy, governments can act as a powerful catalyst to facilitate the investment and shift in capital allocation necessary to make net zero a reality. The Global Investor Statement to Governments on the Climate Crisis is a major and urgent call to action from investors to governments asking them to step up.”

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