Global investor voices are driving policy action on the climate crisis

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Major institutional investors sit in a unique and influential position when it comes to driving action on the climate crisis. With long-term holdings across all economic sectors and geographical jurisdictions, they are acutely exposed to the global systemic risks posed by climate change. That’s why so many are acting and seizing the financial opportunities presented by the transition to a more just, climate-resilient and net zero future.  

But it is now well-understood that current levels of public finance are not meeting the challenge of the trillions required to close the climate investment gap. We need strong market-based policies in place to drive wholesale change.  

That’s why the founding partners of the Investor Agenda – a global investor collaboration on climate change that mobilizes hundreds of investors worldwide – advocates collectively for policies at the global, regional and national levels. In fact, last year, the collaboration coordinated the largest ever investor call for climate policy action with more than 733 investors representing USD $52 trillion in assets under management calling for governments to end fossil fuel subsidies, phase out thermal coal, and mandate corporate climate disclosure.  

Now more than ever, we need every investor in every corner of the world to get behind the call for policy action and influence the state of play at every level of government. Meaningful progress on public policy is critical if we are to achieve the global goal of limiting temperature rise to no more than 1.5°C and prevent further catastrophic damage. 

The impact of the annual Global Investor Statement to Governments on the Climate Crisis  

The annual Global Investor Statement to Governments on the Climate Crisis, coordinated by the Investor Agenda, brings together a regionally diverse body of global investors to urge governments to implement specific priority policy actions that will enable them to invest the trillions needed to respond to the climate crisis. 

First launched in 2014, at the 20th UNFCCC Conference of Parties (COP20), the statement has become a major tool for mobilizing investor voices on climate policy action. Every year since launch, the statement has grown in both number of signatories (409 to 733), and the combined number of assets under management (USD $24 trillion to $52 trillion) represented by those signatories. 

At a high level, the statement creates an environment for pioneering investors in the climate space to knuckle down on specific policies that have the greatest impact for policy change. Its recommendations are designed to speak to all governments globally, but also allow investors to interpret them from a domestic point of view and engage accordingly with their regional and national lawmakers. 

On top of broad impacts and political signals sent by the statement, it has had various tangible and significant outcomes over the years.

Outcomes of the 2019 Global Investor Statement  

The 2019 statement had a strong focus on ambition, ahead of the 2020 deadline set out in the Paris Agreement for all countries to recommunicate or update their greenhouse gas emissions reduction pledges. It also called for the publication of long-term strategies, and Paris-alignment for all climate-related legislation. 

While the outcomes of COP25 in Madrid (under the Chilean Presidency) were not as strong as many had hoped, it was clear that some of the calls contained in the Global Investor Statement had resonated. For example, the Presidency launched a “climate ambition alliance” to accelerate progress towards the Paris goals, and while ambition was not being formally on the agenda, it also began consultations on a series of texts which collectively underlined the importance of the 2020 deadline. 

More tangible outcomes were seen in the EU, where following COP25 heads of state agreed to make the bloc “climate neutral” by 2050. The European Commission subsequently revealed a “European Green Deal” and climate law which committed at least 25% of the EU’s long-term budget to climate action alongside boosting its emissions reduction target for 2030.  

Despite the mixed outcomes of COP25, the political resonance of the 2019 Statement was clear: in an op-ed and a speech to world governments that year, the UN Secretary General directly referenced the statement and its asks on pricing carbon and phasing out thermal coal power. This was backed up on social media by UNFCCC Executive Secretary Patricia Espinosa thanking the signatories of the 2019 Statement “for encouraging governments to step up climate ambition to tackle the global climate emergency and achieve the goals of the Paris Agreement.”  

Read the 2019 Global Investor Statement to Governments on the Climate Crisis 

Outcomes of the 2021 Global Investor Statement  

Learning from the progress made – and the challenges – over the course of 2019, as well as the uncertainty brought about by the subsequent Covid-19 pandemic, the 2021 statement marked the strongest ever unified call from investors for governments to take climate action. The statement was a unified advocacy success with many actions called for reflected directly in agreements flowing from COP26. Some of the outcomes that aligned with the 2021 statement’s ask included:  

  • A new agreement by national governments to strengthen national emissions reductions pledges the following year, in the Glasgow Pact. 
  • A range of ambitious commitments from coalitions of the willing to align with net zero in hard-to-abate sectors like energy, transport, and forests. 
  • The IFRS announcement of the creation of a special body (ISSB) to confront and call out greenwashing in the global financial system and to promote consistent, high-quality disclosures relating to sustainability. 
  • The first ever reference to fossil fuels in a COP decision, with language to “phase-down” use. 
  • The long-awaited agreement on Article 6 of the Paris Rulebook, governing rules for global carbon markets. 

The 2021 statement marked an important moment in investor asks too. Beyond wider economic regulation, investors stepped up their asks for regulation of the financial sector itself, through specific asks, such as mandatory climate disclosure. 

Indeed, the 2021 statement called for mandatory disclosure and in March 2022 after publication, the U.S. Securities and Exchange Commission (SEC) announced its proposed rule for mandatory climate disclosure from all publicly listed U.S. companies. The SEC proposed rule (pages 26 and 27) cites the Investor Agenda 2019 and 2021 Global Investor Statements to Governments on Climate Change as testament to the growing investor demand for climate-related risk disclosure. And is an example of a tangible influence the statement has had on policymakers. 

Read the 2021 Global Investor Statement to Governments on the Climate Crisis 

Look out for the 2022 Global Investor Statement! 

Moving forward, the founding partners of the Investor Agenda will continue to facilitate this critical investor policy action to ensure governments take steps to limit global emissions to 1.5°C, in line with the Paris Agreement. As the climate crisis continues to worsen – and targets to stave off the worst effects are overshot – it is critical that collectively we become bolder and more robust in our response. 

As such, over the next five years, we will further strengthen the statement in ways that will hold governments to account and evolve priority asks. In addition, the statement will evolve to ensure investors around the world are supported in their dialogues with relevant policymakers – showcasing as the investor offer the many actions on corporate engagement and net zero commitments made via the Paris Aligned Asset Owners group, Net Zero Asset Managers initiative and the UN-convened Net-Zero Asset Owner Alliance initiatives, which are also helping to shift the dial on the crisis.  

The 2022 Global Investor Statement to Governments on the Climate Crisis is becoming bolder than ever and seeks to drive action from governments and investors alike. To learn more or to get involved today, please email info@theinvestoragenda.org