While ambitious policy is required in order for low carbon investments to be brought to scale, these examples demonstrate that investors are already acting on climate change in a variety of ways. These activities include direct low carbon investments, the creation of low carbon funds, company engagement, and reducing exposure to fossil fuel and carbon intensive companies.
"Stronger carbon and climate frameworks are needed to catalyze institutional investment," said Fiona Reynolds, managing director of PRI. “The time is now for national governments to overcome the political obstacles that prevent global carbon pricing and hinder long term capital flows into climate mitigation and adaption."
Examples in the report from both developed and developing countries include:
Danish pension fund PKA looking to increase its new and existing offshore wind farm investments to €1.5 billion by the end of 2015.
U.S. insurer and pension fund provider TIAA-CREFF reduces the carbon footprint of its real estate portfolio by 17 percent, cutting 58,000 metric tons of greenhouse gas emissions.
Swedish pension fund AP4 is committed to decarbonizing its entire $20 billion listed equities portfolio.
China Utility-Based Energy Efficiency Finance Program provides loans worth $790 million, financing 226 projects and reducing emissions by 19 million metric tons of carbon.
ASN Bank in the Netherlands to become fully carbon-neutral by 2030. Zurich Insurance Group to invest up to $2 billion in green bonds, one of many commitments this year that has resulted in 20-fold growth in green bond market since 2012.
HSBC Armenia partners with IFC to finance nine small-medium size enterprise energy efficiency projects in Armenia, totaling approximately $25 million and reducing carbon emissions by more than 6,600 tons per year. Global bank ING has in 7 years reduced its energy project loan allocation to coal power from 63 to 13% and increased its allocation to renewable energies from 5 to 39 percent.
In addition, the investor groups have launched a public online database of select low carbon investments made by asset owners such as pension funds and insurance companies. The Low Carbon Investment Registry identifies how institutional investors are directing capital towards low carbon assets. Asset owners around the world will be encouraged to add examples to the Registry leading up to the climate negotiations in Paris.
“The Low Carbon Investment Registry shows how investors are already supporting the transition to a low carbon economy by investing in a variety of different ways – directly into renewable energy projects, into clean energy funds, through green bonds and through the establishment of public-private-partnerships,” said Nathan Fabian, Chief Executive of IGCC. “It gives policymakers a better understanding of how private capital is currently flowing into low carbon investments.”
Several signatories to the Global Investor Statement on Climate Change are expected to announce significant new individual commitments related to climate risk and low carbon investment at the UN Summit on Climate Change on September 23.
For more information, contact pickering@ceres.org and NWilliams@IIGCC.org.
To read the report click here (PDF)
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