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Investors Representing $34 Trillion in Assets Urge Rapid Climate Action by G20

A group of 477 retirement funds and investors representing US$34 trillion in assets is calling on world leaders to adopt carbon pricing and phase out coal plants in a bid to hold average global warming to 1.5°C, in a statement released ahead of the upcoming G20 summit in Osaka, Japan.

“There is an ambition gap” that is “of great concern to investors and needs to be addressed, with urgency,” the financiers write. “It is vital for our long-term planning and asset allocation decisions that governments work closely with investors to incorporate Paris-aligned climate scenarios into their policy frameworks and energy transition pathways.”

The statement “calls on leaders to strengthen international commitments, release long-term strategies to cut emissions, and plan for a just transition to a low-carbon economy,” The Guardian reports. “It would mean setting a deadline to phase out thermal coal electricity and fossil fuel subsidies, putting ‘a meaningful price’ on carbon, and committing to improve climate-related financial reporting standards.”

Reuters says signatories include the CEOs of the seven founding partners of The Investor Agenda, including the Institutional Investors Group on Climate Change and the UN Principles for Responsible Investment (PRI). Legal & General Investment Management and the California Public Employees’ Retirement System (CalPERS) signed the statement, while mega-asset managers BlackRock and Vanguard did not. Signatories in Australia include Australian Super, First State Super, Cbus, Colonial First State Global Asset Management, HESTA, BT Financial Group, VicSuper, New Forests, and IFM Investors, The Guardian adds.

Despite the large, visible holdouts, “a number of institutional investors have already started to divest from fossil fuel companies due to the risk their assets will become stranded as the cost of renewable energy falls,” Reuters notes.

“As investors, in our view the development of new coal power plants after 2020 puts at risk both the return on investment and the world’s chance of limiting global warming in line with the goals of the Paris Agreement,” said Carola van Lamoen of global asset manager Robeco.

In a statement released this week, the We Mean Business Coalition calls on G20 leaders to reaffirm their commitment to implementing the Paris deal, develop long-term climate strategies consistent with last fall’s landmark IPCC report on 1.5°C pathways, adopt more ambitious climate targets over the next year, set new regulations to enforce climate risk disclosure, and support a just transition for workers and communities affected by the transition off fossil fuels.“We must accelerate collective action against climate change because the science is unequivocal, the economic case is beyond doubt, and the window of opportunity is closing fast,” the Coalition states. “The good news is that this transition can create a US$26 trillion growth opportunity and 65 million new jobs by 2030, and that reaching net-zero carbon emissions even for heavy industries is technically and financially possible by mid-century.”