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A Global Forum of Major Capital Market Players Wants to Invest in the Planet - Jun 27, 2013

A Global Forum of Major Capital Market Players Wants to Invest in the Planet - Jun 27, 2013

A new International Energy Agency report states that global temperatures are currently on track to rise between 3.6 °C and 5.3 °C, a change that would have dramatic adverse effects on every sector of the world's economy, from agriculture to automobiles. So with this increasing concern that climate change is already having substantial global economic impacts that are certain to increase, a coalition of institutional investors met in Hong Kong this June to identify the financial and investment risks associated with climate change and the opportunities for investing in a low carbon future. The Global Investor Forum on Climate Change was convened by the Global Investor Coalition on Climate Change (GIC), whose members collectively manage more than $20 trillion of assets!

The GIC Forum is an extraordinary gathering that signals the urgency major capital market players attach to climate change and its far-reaching economic impacts. The investors and policymakers who participated included UNSecretary General Ban Ki-moon, former U.S. Vice President and Chairman of Generation Investment Al Gore and senior investment executives of many of the world's largest pension funds and other institutional investors.

GIC's aim is to reduce climate risks to investors and the world economy by encouraging strong carbon-reducing government policies that will galvanise increased low carbon investments. Ceres, a not-for-profit group that coordinates the Investor Network on Climate Risk (INCR) one of four investor networks that comprises the GIC says a key goal of the forum is to engage Asian investors on climate change as a critical investment risk and opportunity. Investors also have a major role to play in directing capital towards climate change solutions such as clean energy, efficient technologies and resilient infrastructure.

Christopher Davis, director of Investor Programs at Ceres says, "When $20 trillion dollars in capital speaks, companies and governments tend to listen. GIC's investor members have a critical role to play in moving governments and businesses to take the action necessary to avoid the worst impacts of climate change, and to accelerate the necessary transition to a low carbon economy. Till now governmental efforts to address climate change have been inadequate." Therefore, the implications for the global economy are enormous.

This is why commitment from major institutional investors to take action is critical and they will take clear market signals from policy makers, such as limits or taxes on greenhouse gas emissions, to ensure the flow of investment capital towards climate solutions is adequate to meet the challenge. This international collective is an important step forward in advancing investor engagement on this serious issue and a sign that the corporate sustainability movement may be entering a new dynamic fiscal phase. Money always talks. 

Jun 27, 2013