A group of institutional investors — including two of Europe’s largest asset managers and pension funds – announced Tuesday they have joined forces with the United Nations Environment Programme and its Finance Initiative to reduce the carbon footprint of US$100 billion of institutional investments worldwide.
The Fourth Swedish National Pension Fund (AP4), Europe’s largest asset manager Amundi, the Carbon Disclosure Project, and the Portfolio Decarbonization Coalition are participating in the coalition, which was announced by AP4 CEO Mats Andersson during UN Secretary-General Ban Ki-moon’s Climate Summit.
“Climate change is more and more recognized as a financial risk and it is our duty, as trustees, to take concrete steps to reduce this risk,” Andersson said.
“US$ 100 billion is a significant amount but it is absolutely feasible. And we hope that, by reaching this target, investors can show that a different course of action is possible, where institutional investors’ goals are aligned with, and support the common good.”
The announcement is expected to signal carbon-intensive companies around the world that greenhouse gas emissions are not only a threat to economic stability but to their portfolios.
The Portfolio Decarbonization Coalition will convene a group of investors committed to measuring and disclosing the carbon footprint of at least $500 billion of investments.
Investors will then commit to the coalition to reduce their carbon footprint with an intermediate target of $100 billion by December 2015.
“Institutional investors often have long-term investment horizons and are diversified across the economy,” said Achim Steiner, Executive Director of UNEP.
“They have an interest in the long-term stability of the whole system rather than the short-term performance of individual market actors. That is why avoiding disruptive climate change, a truly systemic threat, is of such intrinsic interest to them.”
“Finance can work for the good,” said Yves Perrier, CEO of Amundi. “And this association of climate leaders is an excellent illustration of our will to consistently support our clients’ interest, and take full responsibility in our role in society as a global financial entity.”
The PDC is also supported by the China International Capital Corporation whose chairman, Jin Liqun, said “CICC is committed to promote the decarbonization of investment portfolios and the use of low carbon indexes, particularly in Asia and in China.”