September 17, 2021 - ESG and Climate News

Money Talks ... or does it?

This week a group of 587 investment firms with a collective $46 trillion in assets under management called on the governments of the world to act on climate change. The statement sets out five main requests for governments: 

1. Strengthen national commitments to reduce carbon emissions  

2. Commit to net-zero emissions by 2050 with ‘ambitious interim targets’ 

3. Create domestic policies such as carbon pricing, removing subsidies for fossil fuels and avoiding new carbon-intensive projects 

4. Align Covid-19 recovery plans to support the transition to a low-carbon economy 

5. Implement mandatory climate disclosure rules that align with the TCFD framework. 

My sense is we all suffer from ‘statistics fatigue’ after seeing so many eye-popping billions -and trillions - of figures tossed into every news article about the climate crisis. But, this one is different: The combined assets aligned under the 2021 Global Investor Statement to Governments on the Climate Crisis represent about 40 percent of ALL assets.

In other words, the entities controlling nearly half of all the money on the planet are demanding swift government action to address climate change.   

This is a very welcome development, but these same financial institutions must also do their part. The flow of capital into fossil fuels has increased since the 2015 Paris Climate Accord despite the OECD estimates that nearly $7 trillion of new investment in low carbon technology is needed each year until 2030 to achieve the goals of the accord. It’s not enough for the key sectors to call on each other to act – that is the equivalent of saying “my end of the boat is not sinking.” Ultimately, government, industry, finance, and civil society must all collaborate in an aligned strategy to fight climate change. 

Read the full column here.

Missed our previous edition of ESG & Climate News? Check it out now and stay in the know: September 10, 2021.