To limit global temperature rise to well below 2 degrees Celsius above pre-industrial levels, it is necessary to significantly increase the level of new investment in low carbon technologies and energy efficiency, and to reduce investments in high impact sectors and activities, including the extraction and use of fossil fuels.
The scale of the collective – public and private – challenge is clear. For example, Mission2020 has called for 1 percent of global investor assets to be allocated to low carbon assets, the Climate Bonds Initiative has targeted a total of US$1 trillion of total green bonds issuance by 2020, and Bloomberg New Energy Finance estimates that an additional US$1 trillion in investment is needed in clean energy by 2020 for a 2 degrees scenario.
The actions proposed here (to make low carbon investments, to phase out investments in coal, to integrate climate change into portfolio analysis and decision-making) are consistent with investors’ fiduciary duties.
Report our existing low carbon investments and our existing low carbon investment commitments
We have committed to reporting our existing allocations to low carbon investments and our existing commitments to low carbon investment.
Make and report our new low carbon investments and our new low carbon investment commitments
We have committed to increasing our investments in appropriate low carbon opportunities such as renewable energy, energy efficiency, low carbon transportation, energy storage and energy efficient buildings.
Phase out our investments in thermal coal
We have committed to phasing out our investments in thermal coal activities (specifically thermal coal mining and coal-fired power generation).
Integrate climate change into our portfolio analysis and decision-making
We have committed to integrating climate change-related risks and opportunities in our portfolio analysis and decision-making processes through one or more of:
- Analyzing and assessing climate change-related risks and opportunities (e.g. through carbon footprinting, scenario analysis).
- Making commitments and setting targets (e.g. to carbon footprint reduction, to enhanced portfolio resilience, to decarbonization, including via the Portfolio Decarbonization Coalition).
- Investing in low carbon investment funds and other products (e.g. low carbon indices, climate-aligned bonds).