Global institutional investors call on governments to step up climate policy ambition

Last month 532 investor signatories, representing US $39 trillion in assets, issued a new and ambitious statement urging governments around the world to raise climate ambitions in line with the goal of limiting global temperature rise to 1.5C.

The 2022 Global Investor Statement to Governments on the Climate Crisis called for stronger medium and long-term climate strategies through fresh commitments to transition away from fossil fuels, end deforestation, bolster flows of climate finance, and enhance corporate climate risk disclosures. The statement is open for investors to join the unified call for government action until COP27, due to take place in Sharm el-Sheikh, Egypt, in November.

Recommendations

Full recommendations can be found in the statement, but in summary investors urge governments to:

  • Ensure that the 2030 targets in their Nationally Determined Contributions align with the goal of limiting global temperature rise to 1.5°C.
  • Implement domestic policies across the real economy and take early action to ensure that their 2030 greenhouse gas emissions are aligned with the goal of keeping global temperature rise to 1.5°C.
  • Contribute to the reduction in non-carbon dioxide greenhouse gas emissions and support the effective implementation of the Global Methane Pledge to reduce emissions by at least 30 percent from 2020 levels by 2030.
  • Scale up the provision of climate finance from the public and the private sector for mitigation, and for adaptation and resilience, with a particular focus on the needs of developing countries.
  • Strengthen climate disclosures across the financial system.

Last year countries signed the Glasgow Climate Pact at the COP26 Climate Summit, committing to strengthen national climate action plans in line with the 1.5C temperature goal as part of the Paris Agreement. Despite this, campaigners warn a large majority are not on course to deliver the level of decarbonisation necessary.

Bleak warning from the UN

The 2022 Global Investor Statement to Governments on the Climate Crisis was launched just the day before the UN’s secretary general António Guterres warned that climate impacts are heading into “uncharted territories of destruction”. His words followed publication of the annual ‘United In Science‘ global climate assessment coordinated by the World Meteorological Organisation (WMO). It compiles the most recent science related to climate change, impacts and responses. This year’s assessment reveals that as the world is experiencing increasingly high global temperatures and destructive climate-driven floods, droughts and heatwaves, greenhouse gases in the atmosphere continue to rise.

It also highlights that pledges by countries to curb greenhouse gas emissions made last year will not keep global warming to the 1.5°C limit; the ambition of those pledges needs to be seven times higher to limit warming to 1.5°C and four times higher to meet the less stringent target of 2°C of warming.

Net zero commitments are not an option. We’re pleased to see investors and asset managers demanding action through policy (also discussed here), and calling for greater disclosure across the financial system.

Image credit to Vecteezy.com.

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