Investors sign up to climate action plan at UN summit

Almost 50 institutional investors signed up to a ?climate risk action plan? last week, which includes a promise to plough $10 billion into clean technology within two years.

At a summit at the United Nations in New York, signatories also pledged to require asset managers, consultants and advisors to consider climate change risks and opportunities in their investment processes ? for example by using a sustainability or climate risk screen.

Mindy Lubber, president of investor and environmental coalition Ceres, which launched the plan alongside the UN Foundation, said: ?This action plan reflects the many investment opportunities that exist today to put a dent in global warming pollution, build profits and benefit the global economy.?

Connecticut state treasurer Denise Nappier added: "Thanks to the leadership of many participating at this summit, the idea that climate risk affects many industries around the world that are embedded in our portfolios is being absorbed into the very fibre of our financial markets, from banking to investment, from insurance to re-insurance."

Institutions that signed the action plan manage a total of $1.75 trillion and include the California Public Employees? Retirement System, a raft of state treasurers, city comptrollers and foundations, Boston Common Asset Management, Calvert, F&C Management, Al Gore?s Generation Investment Management and Khosla Ventures.

Alain Grisay, chief executive of London-headquartered F&C, said: ?Climate change has the potential both to cause devastating damage to the economy if we do nothing about it, and to generate very profitable investment opportunities if we confront it by taking sensible early action.?

Five other institutions signed up as ?supporters in principle?, including the asset management division of Deutsche Bank, Dutch pension giant ABP and the British Telecommunications Pension Scheme.

The institutions have also set a target to reduce energy use from their core real estate portfolios by 20% over three years, and incorporate green building standards into investment decisions.

Under the action plan, signatories likewise promise to:

• Push for the companies they invest in to report on the financial risks posed by climate change;
• Encourage debt and equity analysts, ratings agencies and investment banks to factor in long-term carbon costs ? which they put at a range of $20-40 per tonne of carbon dioxide equivalent;
• Push for the Securities and Exchange Commission and Congress to require companies to disclose climate risks as part of their regular securities filings;
• And call for a mandatory US policy to cut greenhouse gas emissions and support a successor to the Kyoto Protocol.

By: www.environmental-finance.com

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