Tag Archives: Global Investor Coalition on Climate Change

Carbon emissions, Clean energy, Climate Change, COP21 Climate Conference Paris, Fossil fuels, Socially responsible investment, Sustainability investments

400+ investors with more than $24 trillion support Paris climate agreement

Repost from Ceres – Mobilizing Business Leadership for a Sustainable World

Leading Investors and Businesses Back A Strong Paris Climate Agreement

By Christopher N. Fox

The UN climate conference now underway in Paris represents a critical opportunity to limit the risks of climate change and accelerate the shift to clean energy.  That’s why Ceres and leading investors and businesses are in Paris making the economic case for a strong global climate agreement. Together, we are focused on the dual objectives of addressing climate risks by ratcheting down reliance on high carbon resources, on the one hand, while simultaneously seizing the Clean Trillion opportunity tied to clean energy investment and transition, on the other.

Record investor and business support

As the Paris negotiations officially have kicked off, over 400 investors with more than $24 trillion in assets released a statement [see column at right] calling for an ambitious global agreement on climate change.  That’s the largest-ever group of investors calling for strong government action on climate change.  Investors are publicizing their clean energy investments through the Global Investor Coalition on Climate Change’s Low-Carbon Investment Registry, and announcing other actions they are taking on climate change through the new Investor Platform for Climate Actions.

In addition, more than 1,600 companies have signed Ceres’ Climate Declaration; 147 companies have signed the White House Act on Climate Business Pledge; six major U.S. banks released a statement calling for a strong climate deal; and the CEOs of 14 major food companies have launched a high profile climate pledge.  And thousands of businesses worldwide are joining forces with the We Mean Business Coalition in support of climate policy action.

Tackling climate change is a multi-trillion dollar opportunity

Combating climate change requires rapid, large-scale shifting from fossil fuels to clean energy.  This transition to clean energy is a multi-trillion dollar opportunity.  To limit warming to below two degrees Celsius – a key goal of the Paris climate talks – the International Energy Agency estimates the world needs to invest an additional $40 trillion in clean energy by 2050.  That’s slightly more than an additional $1 trillion invested in clean energy – a “Clean Trillion” – per year for the next 35 years.

The Paris climate talks are catalyzing important momentum toward the Clean Trillion goal.  The national climate plans that almost every nation in the world has submitted to the UN can spur $13.5 trillion in investment in energy efficiency and low-carbon technologies between 2015 and 2030, according to a recent IEA analysis.

Much more action needed after Paris

A strong Paris climate agreement will accelerate the transition to clean energy, but much more action will be needed in the years ahead to limit warming to below two degrees Celsius.  In the months after Paris, the most important single step that the U.S. can take to lead on climate change is to implement the EPA Clean Power Plan, the first-ever nationwide limits on carbon pollution from electric power plants.  This US plan for boosting electric sector clean energy transition is a critically important step for the climate and the economy, as recognized by leading voices in the business community — more than 365 companies and investors announced their support for the plan in a July 2015 lettercoordinated by Ceres.

As aptly noted by Letitia Webster, senior director of global sustainability at VF Corporation, a North Carolina-based apparel company whose brands include The North Face, Timberland and Reef, “The Clean Power Plan will enable us to continue to invest in clean energy solutions and further advance our greenhouse gas reduction goals.”

And as Mars, Inc. Global Sustainability Director Kevin Rabinovitch points out, “It’s going to take action from all of us … For businesses like Mars, that means delivering on efficiency and renewable energy; for the EPA and state governors, that means developing and delivering against initiatives like the Clean Power Plan.”

Both VF Corporation and Mars are represented as part of the delegation of business and investor leaders that Ceres is bringing to the Paris climate talks to support strong climate policy action. By backing a strong Paris climate agreement and the EPA Clean Power Plan, leading investors and businesses are making a smart business decision.  They are supporting policies that will expand investment in the clean energy technologies that the world needs to stabilize the climate and promote a sustainable economy and world.

To learn more about Ceres plans for COP21 in Paris, and what actions leading investor and business leaders have been taking on the road through Paris click here.

Repost from Investor Platform for Climate Actions

Global Investor Statement on Climate Change - groupsGLOBAL INVESTOR STATEMENT ON CLIMATE CHANGE

This statement is signed by 404 investors representing more than US $24 trillion in assets.

We, the institutional investors that are signatories to this Statement, are acutely aware of the risks climate change presents to our investments. In addition, we recognise that significant capital will be needed to finance the transition to a low carbon economy and to enable society to adapt to the physical impacts of climate change.

We are particularly concerned that gaps, weaknesses and delays in climate change and clean energy policies will increase the risks to our investments as a result of the physical impacts of climate change, and will increase the likelihood that more radical policy measures will be required to reduce greenhouse gas emissions. In turn, this could jeopardise the investments and retirement savings of millions of citizens.

There is a significant gap between the amount of capital that will be required to finance the transition to a low carbon and climate resilient economy and the amount currently being invested. For example, while current investments in clean energy alone are approximately $250 billion per year, the International Energy Agency has estimated that limiting the increase in global temperature to two degrees Celsius above preindustrial levels requires average additional investments in clean energy of at least $1 trillion per year between now and 2050.

This Statement sets out the contribution that we as investors can make to increasing low carbon and climate resilient investments. It offers practical proposals on how our contribution may be accelerated and increased through appropriate government action.

Stronger political leadership and more ambitious policies are needed in order for us to scale up our investments. We believe that well designed and implemented policies would encourage us to invest significantly more in areas such as renewable energy, energy efficiency, sustainable land use and climate resilient development, thereby benefitting our clients and beneficiaries, and society as a whole.

HOW WE CAN CONTRIBUTE

As institutional investors and consistent with our fiduciary duty to our beneficiaries, we will:

■ Work with policy makers to support and inform their efforts to develop and implement policy measures that encourage capital deployment at scale to finance the transition to a low carbon economy and encourage investment in climate change adaptation.

■ Identify and evaluate low carbon investment opportunities that meet our investment criteria and consider investment vehicles that invest in low carbon assets subject to our risk and return objectives.

■ Develop our capacity to assess the risks and opportunities presented by climate change and climate policy to our investment portfolios, and integrate, where appropriate, this information into our investment decisions.

■ Work with the companies in which we invest to ensure that they are minimising and disclosing the risks and maximising the opportunities presented by climate change and climate policy.

■ Continue to report on the actions we have taken and the progress we have made in addressing climate risk and investing in areas such as renewable energy, energy efficiency and climate change adaptation.

SCALING UP INVESTMENT: THE NEED FOR POLICY ACTION

We call on governments to develop an ambitious global agreement on climate change by the end of 2015. This would give investors the confidence to support and accelerate the investments in low carbon technologies, in energy efficiency and in climate change adaptation.

Ultimately, in order to deliver real changes in investment flows, international policy commitments need to be implemented into national laws and regulations. These policies must provide appropriate incentives to invest, be of adequate duration to improve certainty to investors in long-term infrastructure investments and avoid retroactive impact on existing investments. We, therefore, call on governments to:

■ Provide stable, reliable and economically meaningful carbon pricing that helps redirect investment commensurate with the scale of the climate change challenge.

■ Strengthen regulatory support for energy efficiency and renewable energy, where this is needed to facilitate deployment.

■ Support innovation in and deployment of low carbon technologies, including financing clean energy research and development.

■ Develop plans to phase out subsidies for fossil fuels.

■ Ensure that national adaptation strategies are structured to deliver investment.

■ Consider the effect of unintended constraints from financial regulations on investments in low carbon technologies and in climate resilience.

ABOUT UNEP FI – UNEP FI is a global partnership between UNEP and the financial sector. Over 200 institutions, including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance. Through its Climate Change Advisory Group (CCAG), UNEP FI aims to understand the roles, potentials and needs of the finance sector in addressing climate change, and to advance the integration of climate change factors – both risks and opportunities – into financial decision-making. Visit www.unepfi.org.

ABOUT IIGCC – The Institutional Investors Group on Climate Change (IIGCC) is a forum for collaboration on climate change for investors. IIGCC’s network includes over 90 members, with some of the largest pension funds and asset managers in Europe, representing €7.5trillion in assets. IIGCC’s mission is to provide investors a common voice to encourage public policies, investment practices and corporate behaviour which address long-term risks and opportunities associated with climate change. Visit www.iigcc.org.

ABOUT INCR – The Investor Network on Climate Risk (INCR) is a North Americafocused network of institutional investors dedicated to addressing the financial risks and investment opportunities posed by climate change and other sustainability challenges. INCR currently has more than 100 members representing over $13 trillion in assets. INCR is a project of Ceres, a nonprofit advocate for sustainability leadership that mobilises investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Visit www.ceres.org.

ABOUT IGCC – IGCC is a collaboration of 52 Australian and New Zealand institutional investors and advisors, managing approximately $1 trillion and focussing on the impact that climate change has on the financial value of investments. The IGCC aims to encourage government policies and investment practices that address the risks and opportunities of climate change, for the ultimate benefit of superannuants and unit holders. Visit www.igcc.org.au.

ABOUT AIGCC – The Asia Investor Group on Climate Change (AIGCC) is an initiative set up by the Association for Sustainable and Responsible Investment in Asia (ASrIA) to create awareness among Asia’s asset owners and financial institutions about the risks and opportunities associated with climate change and low carbon investing. AIGCC provides capacity for investors to share best practice and to collaborate on investment activity, credit analysis, risk management, engagement and policy. With a strong international profile and significant network, including pension, sovereign wealth funds insurance companies and fund managers, AIGCC represents the Asian voice in the evolving global discussions on climate change and the transition to a greener economy. Visit http://aigcc.asria.org/.

ABOUT PRI – The United Nations-supported Principles for Responsible Investment (PRI) Initiative is an international network of investors working together to put the six Principles for Responsible Investment into practice. Its goal is to understand the implications of Environmental, Social and Governance issues (ESG) for investors and support signatories to incorporate these issues into their investment decision making and ownership practices. In implementing the Principles, signatories contribute to the development of a more sustainable global financial system. Visit www.unpri.org.

ACKNOWLEDGMENTS
The sponsoring organisations thank CDP for its support of the statement. CDP is an international, not-for-profit organisation providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information (www.cdp.net).

THIS STATEMENT WAS LAUNCHED IN SEPTEMBER 2014.

SIGNATORIES

GlobalInvesorStatementClimateChange_Signatories2015-11-22Nov_P1
GlobalInvesorStatementClimateChange_Signatories2015-11-22Nov_P2
GlobalInvesorStatementClimateChange_Signatories2015-11-22Nov_P3

 

Climate Change, Oil Industry

Oil Majors Resist Call To Boost Leadership On Climate Change

Repost from Forbes.com
[Editor: This is a MUST READ report on unsatisfactory results of a great investor effort, called the Carbon Asset Risk (CAR) initiative, (coordinated by Ceres and the Carbon Tracker initiative, with support from the Global Investor Coalition on Climate Change).  – RS]

Oil Majors Need To Boost Leadership On Climate Change

5/29/2014  |  Mindy Lubber

Earlier this month, Shell became the latest oil major to respond to an international group of investors asking the world’s largest fossil fuel companies to assess the risks they face from climate change. These investors, managing trillions of dollars in assets, are motivated by concerns that companies in their portfolios are not adequately preparing for a future of lower demand for fossil fuels as the world transitions to cleaner energy sources. Not to mention climate-related physical impacts such as rising seas, stronger storms and more severe droughts.

Norwegian oil rig Statfjord A

Like its peers ExxonMobil and Statoil, which have also responded publicly to the request, Shell says it views climate change as a serious issue, and that the company invests in carbon-reducing technologies and incorporates a carbon price in business planning. And, like Statoil, Shell calls the current international goal to limit global warming to below two degrees Celsius “desirable.”

While it is good to see these companies publicly acknowledging climate change and the need to reduce carbon pollution, Shell and its peers appear to be preparing for a world of ever rising – not declining – oil demand. Indeed, ExxonMobil, Statoil and Shell all argue that oil demand will keep growing until at least 2030. They largely ignore the grim picture painted by the Intergovernmental Panel on Climate Change of what the world will probably look like if carbon pollution continues unabated, arguing that it is impossible to turn the tide in the timeframe scientists say is necessary. As a result, the companies reject the idea that they face any substantive financial risk.

Of course, these arguments are not surprising. In fact, the companies’ approach to shareholder engagement on this issue has been a constant refrain about the essential role they play in meeting the world’s insatiable demand for fossil fuels. This perspective is short-sighted and needs to evolve.

Shell and Statoil do provide some discussion of the International Energy Agency’s scenario that shows how the two-degree goal could be achieved, which shows oil demand peaking around 2020 and then declining. But they are quick to point out that even under that scenario, the world will continue to use oil and companies will need to make new oil discoveries to meet consumer demand. Statoil comes the closest to answering investors, saying, “In Statoil we are of the opinion that we have a fairly robust project portfolio, even in the event that global or regional climate regulations were to become much stricter than what we currently expect.”

Investors know that the world is not going to stop using oil overnight, and they aren’t advocating for that either. Rather, as smart stewards of capital, investors want to know what oil projects companies are betting billions on, which may be suspect down the road. These riskier, expensive projects – like deepwater drilling and oil sands – might make sense according to the companies’ bullish oil demand growth forecasts, but would be highly questionable in a world where some of that demand growth doesn’t materialize.

This is a critical question for investors, not just because they don’t want to finance oil projects that shouldn’t go forward in a world that takes the economic threat of climate change seriously, but also because oil demand destruction is a real risk. Companies know this, but are declining to discuss it publicly.

Recent research by the Carbon Tracker Initiative (CTI) shows that, over the last decade, capital spending by the 11 largest publicly traded oil companies has increased five-fold, while their production levels have remained essentially flat. Meanwhile, despite historically high oil prices, their returns have fallen below a 30-year average of 11 percent, leading firms like Goldman Sachs to raise questions about whether companies can generate enough cash to meet their dividend and investment commitments without oil prices rising even higher. Yet, CTI shows how, in a world that tackles climate change, lower oil demand could push oil prices down to around $75 per barrel.

In its response, Shell outlines an upstream capital investment budget for 2014, including exploration expenditures of $35 billion, with the “oil” element of that being an estimated $10 billion. Indeed, over the next decade, CTI shows that the oil industry has the potential to invest an estimated $1.1 trillion for high-cost oil projects that require oil prices above $95 per barrel to be profitable. Shell accounts for more than $63 billion of that. While such projects are economically marginal even at today’s oil prices of just over $100 per barrel, they could become uneconomic if oil demand were to decline by a relatively small amount. Shell openly admits that high oil prices are needed to make such projects viable.

Despite how much certainty these companies have expressed that strong international policies on climate change are unlikely in the next few years – and we have reason to believe they’re wrong – this isn’t the only factor that could dampen oil demand. We’re already seeing increasing fuel efficiency, fuel substitution and technological advances in clean energy and electric vehicles. The oil majors themselves are already seeing flat to declining oil demand in the U.S. and other developed countries due to these factors. They see virtually all of the demand growth coming from the developing world, and argue that meeting that demand is important to improve living standards for the world’s poor. It’s a fair point.

But what is the best way to meet that energy demand, considering that climate change disproportionately affects the world’s poor? Scientists warn that hundreds of millions of people will be displaced by the end of this century due to climate impacts, increasing the risk of violent conflict and wiping trillions off the global economy. Furthermore, how much oil will the developing world actually demand if prices keep rising? Given that oil prices are high now and the industry needs them to stay that way, oil alternatives would be a safer bet as developing countries reach for the living standards of the developed world.

It’s not only fair for investors to be asking companies for more transparency around their capital spending plans – it is the fiscally responsible thing to do. We have mistakenly invested in companies and markets that were ‘too big to fail’ in the past, and we have seen the catastrophic results. The fact is that the effects of the subprime mortgage meltdown on the global economy pales in comparison to what will happen if we do not change how we invest in energy. As major players in an industry the world relies on for so much, ExxonMobil, Statoil and Shell have not yet demonstrated the kind of leadership we need from them.