Blogs

The Intergovernmental Panel on Climate Change (IPCC) released its Synthesis Report for the Sixth Assessment Report in March 2023.

The report reiterates that efforts are currently far short of the Paris Agreement’s goal of “limiting global temperature increase to well below 2 degrees Celsius, while pursuing efforts to limit the increase to 1.5 degrees.” While the report identifies that the planet will warm by 1.5 degrees Celsius in all scenarios, it reassures that there’s still time to ensure that temperatures don’t go any higher.

The report views increasing climate finance investments as critical to meeting this global goal. Reducing barriers to climate finance investments is key. Governments have a role to play, through public funding and strong signals to investors, as do investors, central banks and financial regulators.

To this end, the Founding Partners of the Investor Agenda – AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP FI – are committed to providing investors with the tools they need to take actions that accelerate the transition to a net zero emissions economy.

Read some of their reactions to the IPCC report below.

Rebecca Mikula-Wright, CEO of Asia Investor Group on Climate Change (AIGCC) and Investor Group on Climate Change (IGCC) and Founding Partner of The Investor Agenda:

“The latest IPCC Synthesis Report underlines what most researchers and scientists have been emphasising for decades – human-caused climate change has widespread adverse impacts to nature, communities, and economies.

“The IPCC report identifies that lack of private sector finance is a key barrier to adaptation. Without rapid mitigation, accelerated adaptation actions and investment, climate-related losses and damages will continue to exacerbate the impacts of climate change in the highly vulnerable Asia-Pacific region.

“Investors need to start accounting for physical risks of climate change through assessments to ensure resilience of their investment portfolios.

“For many Asian markets, the discussion should pivot from ambition to implementation. Attracting private capital into green industries and infrastructure with strong domestic policy settings will be critical to achieving many countries’ climate goals.

“In Australia and New Zealand, the progress we’ve started needs to radically accelerate, taking advantage of the much more credible climate policy environment.”

Amir Sokolowski, Director – Climate Change at CDP, a Founding Partner of The Investor Agenda:

“In the five years since the IPCC’s sixth cycle began with the special report on global warming of 1.5°C (SR1.5), our window to 1.5°C has rapidly narrowed. The IPCC’s Mitigation of Climate Change Report last April found that, since SR1.5, the likelihood of staying below 1.5°C under even the most ambitious mitigation pathways has dropped by almost 10% – from 46% in SR1.5 to 38% in AR6.

“… This is not good enough, particularly when the necessary journey for companies is clear. Five-year transition plans outlining how companies will transition to the 1.5°C-aligned business model, how their capital allocation will align with this and what governance the company has in place to ensure delivery are essential for short-term action. Credible transition plans toward a net-zero future must include increasing and tracked adaptation measures if they are to be truly effective, alongside robust, science-based 2030 targets.”

Read the full reaction at CDP.

Mindy Lubber, CEO and President of Ceres and Founding Partner of the Investor Agenda:  

“Every investor should have an ambitious action plan in place by the end of the year, and every company should be implementing their transition plans by early 2024,” Lubber added. “Policymakers should build upon the landmark Inflation Reduction Act, the largest federal investment in climate action, to make further progress towards cutting emissions in half by 2030. Private sector action plans coupled with historic investments and incentives are essential to building a stronger, more resilient economy as quickly and as equitably as possible.”

“The transition is already reducing shareholder exposure to billions of dollars’ worth of climate risk, unlocking the potential for trillions of dollars of investment in clean energy, creating good paying jobs and building sustainable infrastructure including the construction of offshore wind farms, installing solar panels, manufacturing electric vehicles, and creating net zero buildings,” Lubber added. “Moving forward, we need to provide opportunities for everyone, especially populations which have too often been left behind. And we have seen that vulnerable communities, including low-income and communities of color, are the ones most adversely affected by climate pollution.”

Read the full reaction at Ceres.

A blog from IIGCC, a Founding Partner of The Investor Agenda reads:  

“The report also renews calls for more investment in developing nations, reflecting the inclusion of loss and damage at COP27 in Egypt. The IPCC Chair made frequent references to the responsibility of rich nations and the technologies they possess.

“This also represents an opportunity for institutional investors, the panel suggested, with scope beyond mitigation into other areas such as energy access in developing nations.

“Aligning investment in emerging markets is already an important topic for our members and a key part of our strategy. We are engaging with external partners now to begin formulating guidance.

“Overall, the report is a hugely impressive body of work complied by experts, mostly alongside full-time jobs. Their hope, like so many others, is that it translates into policies that accelerate action.”

Read the full blog at IIGCC.

Edward Baker, Head of Climate Policy at the Principles for Responsible Investment, a Founding Partner of the Investor Agenda

“The IPCC has today issued its starkest call yet: we are running out of time. Today’s report – which should serve as an important informer for investors implementing a science-backed climate strategy – makes the need for urgency abundantly clear. The longer we delay the greater the risks and damages will be. Every fraction of a degree of warming and every year matters in efforts to avoid the most damaging impacts of climate change. Future market stability depends on choices taken now and in the near-term, and investors sit at the heart of the required response. We need deep, rapid, and sustained emissions reduction, a greater focus on adaptation, equitable solutions, scaled-up public and private financing, and international cooperation to manage climate risk effectively. Not only that, but the industry must be supported by complementary policy action, specifically by removing the barriers stymying the flow of public and private capital to climate solutions. We already have most of the solutions, but we need to go further and faster to see these implemented.”

Read the full comment at PRI.