3-Nov-14 / Posted By Lynn Connolly
Climate Change Pledges = Action?
September 2014 was an exciting month for climate change mitigation and adaptation. The People’s Climate March took New York and the globe by storm. The Divest-Invest coalition saw great momentum with the launch of the Individuals pledge, and the announcement that total pledges to divest from fossil fuels from over 181 institutions and local governments and 646 individuals represent over 50 billion in assets. And, there were numerous commitments, pledges and press releases by institutional investors which included some of the world’s largest asset managers, pension funds, and family offices. New developments included The Global Investor Statement on Climate Change, The Low Carbon Investment Registry, The Portfolio Decarbonization Coalition, and the Montreal Carbon Pledge. All of this was followed with the EU announcement in October committing to 40% cuts in greenhouse gas emissions by 2030.
Great news all around. Institutional investors are taking action – right? Noting that institutional investors manage over US $75 trillion in assets globally, let’s review the pledges and commitments and put this in perspective:
The Global Investor Statement on Climate Change1: Signed by over 350 investors representing more than US $24 trillion in assets, signatories indicate that they are aware of risks, capital requirements, steps that can be taken, and the need for government policy action to facilitate climate change mitigation and adaptation. Basically signatories are acknowledging the how which is to work with policy makers, identify and evaluate, develop capacity to assess risks, work with companies invested in, and continue to report on actions taken. But, signatories have not defined the what or when. There are no definitive statements on GHG emissions reduction targets or climate change actions.