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The Intergovernmental Panel on Climate Change (IPCC) has released its latest Working Group III report on the mitigation of climate change.  

The report has a clear warning: without fast and collaborative climate action, a 1.5°C future may be out of reach. It finds that existing policies – even if they are to be successful – currently fall short of what’s needed and is set to lead to 2.7°C or more warming by the end of the century. Even when factoring in the current net-zero climate commitments, the report finds that we would still produce warming of around 2.2°C. Inaction from governments, businesses and investors is no longer an option in the critical years to come.  

But the IPCC report does show that with a significant escalation of efforts, there is hope. By increasing financial investment and encouraging vital climate cash pledged by governments, scientists report that we can limit global warming and protect people from some of the most disastrous and far-reaching impacts of the climate crisis. 

That’s why the Investor Agenda, a common leadership agenda, is committed to helping investors take climate action to accelerate a net zero emissions economy. It does this through providing clear expectations and guidance on developing and implementing Investor Climate Action Plans (ICAPs). The ICAPs expectations ladder helps investors map out their climate transition, wherever they are on their journey. The Investor Agenda is driving collective investor policy advocacy through both targeted regional activities and its annual Global Investor Statement to Governments on the Climate Crisis. 

The Investor Agenda is made up of seven major groups from around the globe working directly with investors. They include: AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP FI. Read their reactions to the IPCC report below. 

Rebecca Mikula-Wright, CEO of AIGCC and IGCC and Founding Partner of the Investor Agenda:  

“This latest IPCC report points out the priorities for rapid mitigation to limit global warming, it will involve industries, governments and companies, and international co-operation will be crucial to meet 2030 targets. 

“Net zero commitments must focus on deep emissions reductions first and be supported by detailed and transparent action plans.  

“Governments will also need to follow up on these pledges with the implementation of strong policy support measures to ensure that companies are able to take timely action to reduce dependence on fossil fuels. 

“By working with investors to put in place robust policies, strong targets and a clear roadmap to reach net zero emissions, Asian governments can unlock these enormous investment opportunities and the jobs, economic growth and competitive advantage they will bring. 

“Institutional investors can help their countries mitigate and adapt to the effects of global heating by adopting and accelerating Investor Climate Action Plans (ICAPs), published by The Investor Agenda, through four pillars: investment practices; corporate engagement; policy advocacy; and investor disclosure.”

Read the full reaction at AIGCC 

“Australia’s investors are very aware of the rapid economic changes that are necessary to protect their beneficiaries’ financial interests.
 
“This latest report emphasises that companies across almost every sector of the economy need to accelerate their plans to reach net zero emissions and align their capital expenditure with their published plans. 
 
“The fastest progress towards a net zero economy is going to be electrifying our energy systems from renewable sources and closing coal-fired generators by 2040.
 
“Companies should expect hard questions when capital is being spent on new coal or gas projects, where there will be increasing risk of stranded assets.
 
“Plans that rely on carbon offsets and carbon capture to reach net zero can also expect very close scrutiny.”  

Read the full reaction at IGCC.

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

“The IPCC has shown time and again that climate change is human-induced, widespread, rapid and intensifying. The three reports comprising AR6 paint a singular, full and thorough picture: the science, the pathways, and the need for adaptation and mitigation in a prosperous world. It is inexcusable that the window for meaningful action continues to rapidly close when we – governments, regulators, corporates and capital markets – know well what needs to be done. Solutions exist, technologies are available, and capital is ready to be allocated, yet the pace of tangible action continues to lag behind. 

“That the IPCC has chosen to focus more on Co2 removal is a sign of urgency. That they turn their attention to behaviour change is a pathway of hope: it indicates that technology and science are ready, and that change is in the hands of every actor, beyond only national governments. 

“Governments cannot wait for more scientific reports or “red alerts”: a focus on immediate emission reductions is now more than critical. Governments were given an unprecedented opportunity as a result of COP26 to update their Nationally Determined Contributions on an annual basis. They must capitalize on this and update their NDCs in line with 1.5°C by the end of 2022, with robust roadmaps and policies to support their delivery. Long-term strategies and sectoral plans must be implemented through an evidence-based approach, providing non-state actors with the capacity to drive action and energise the ambition loop dynamic.”  

Read the full reaction at CDP.

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

“The new IPCC report unequivocally demonstrates that while global leaders have the tools to minimize future irreversible impacts of the climate crisis, we still have to raise our ambition and take the necessary aggressive action to reduce greenhouse gas emissions. Droughts, floods, fires, and heatwaves are wreaking havoc across communities and economies, and those damages will only grow without concerted effort to reduce emissions immediately. Inaction, or insufficient action, is no longer an option if we hope to avoid further catastrophic climate disasters. 

“The report affirms what we already knew: we have the technology and the financial resources to successfully transition to a cleaner, healthier, more equitable world with a stable climate. And a stable climate will benefit companies, communities, and nations with greater economic strength and increased physical security. We know that policies aimed at reducing emissions work. 

“The window to reduce severe suffering and loss is rapidly closing. Governments, investors and other financial institutions, and companies are all impacted, and must act immediately if we hope to prevent more suffering — particularly in marginalized communities in the United States and around the world — while preventing further irreversible damage to the world’s ecosystems. 

“We have the tools to reduce the physical and economic impacts of the climate crisis at our fingertips. Investors, companies, policymakers, and regulators have an imperative to take immediate, clear-eyed action to set, and more importantly, execute upon, ambitious emissions reductions. Investors and our financial institutions must implement climate action plans that will rapidly redirect flows of money toward clean energy solutions, rather than fossil fuels. We have the global capital needed to reach our critical climate goals, but we need to ensure that financing flows to the right places.” 

Read the full reaction at Ceres.

Stephanie Pfeifer, CEO of IIGCC and Founding Partner of The Investor Agenda:   

“Today’s IPCC report is a powerful reminder not just to investors, but governments, companies and civil society of the role they all must play in facilitating emissions reductions at scale if global warming is to be limited to 1.5°C. While the rallying cry is as loud and necessary as ever, the IPCC’s report does highlight that climate action is already delivering some positive results, noting that in many countries that there are policies, regulations and market instruments that are proving effective.  

“For investors, by highlighting the need to reduce emissions in industry, particularly those on the demand side in energy intensive sectors such as steel, cement and aviation, the IPCC report makes clear the fundamental and valuable role investors must play in helping companies in such sectors towards decarbonisation. As ever, and as set out by Climate Action 100+’s global sector strategies, this starts though effective and meaningful corporate engagement to ensure companies develop and implement credible net zero transition plans. This must be the absolute base for companies and investors globally. 

“The report is unequivocal in the need for scaling up climate solution technologies, including renewables. The investment gap between what is currently being allocated to such technologies and where it needs to be, must be cut rapidly; failure to do so threatens to undermine all mitigation efforts. While investors alone cannot solve this problem, working with policy makers, regulators, industry and more, they have the leading role in ensuring the current investment gap becomes a thing of the past.”    

Read the full reaction at IIGCC. 

Shelagh Whitley, Chief Sustainability Officer at PRI, a Founding Partner of The Investor Agenda:  

“Today’s IPCC’s report underlines the urgency of the climate crisis. To avoid a dangerous increase in emissions, we must cease new investments in fossil fuels and increase financial flows towards assets which facilitate the low carbon transition. Encouragingly, we know from today’s report that we have the solutions needed to halve emissions by 2030. We also know that there is sufficient global capital and liquidity to finance these solutions. Now, we must see urgent action to finance the solutions needed. 

“Investors have a leading role to play in this process. The IPCC report notes that investors are raising awareness of climate change as a financial risk. However, climate-related financial risks, whether from physical climate impacts or from a disorderly transition to a low carbon economy, are still greatly underestimated by parts of the industry. 

“The PRI will continue to work with our signatories to support and increase their ambition on climate issues. In addition, we will continue our collaborative work to ensure a supportive policy landscape exists to best enable the vital shift to a net zero economy. The IPCC report shows that there is no time to waste – urgent action is needed to secure the future of our planet.”  

Read the full reaction at PRI.

Two of the Founding Partners of the Investor Agenda, PRI and UNEP FI, hosted a webinar to discuss the findings of the IPCC report and what it means for investor climate action.

You can watch the webinar here.