A group of 285 of the world’s leading investors issued a “2011 Global Investor Statement on Climate Change” urging governments and institutional policy makers to take new policy action to stimulate private sector investment in climate change solutions. According to the Institutional Investors Group on Climate Change (IIGCC), “current levels of investments in low-carbon technology and infrastructure are substantially lower than the $500 billion per year deemed necessary by the International Energy Agency to hold the increase of global average temperatures below 2 degrees Celsius—the target agreed in Cancun...” Since 2008, investor support for climate action has more than doubled, when 150 investors with $9 trillion in assets under management first urged government leaders to act on climate change. The IIGCC currently manages more than $20 trillion in assets.
IIGCC also released a report with the Statement, entitled “Investment-Grade Climate Change Policy: Financing the Transition to the Low-Carbon Economy“. The report emphasizes the importance of investment-grade policy to encourage institutional investors to allocate capital toward climate change solutions, including appropriate governmental incentives to compensate for increased risk and a sufficient scale for technology deployment. In addition, the report underscores that long-term policy stability is critical and that retroactive policy changes can significantly damage investor confidence.
The IIGCC calls for both domestic and international policy action, including:
- definition by governments of clear short-, medium-, and long-term greenhouse gas emission targets and enforceable legal mechanisms and timelines;
- lasting financial incentives that favor low-carbon assets;
- lasting and comprehensive policies that accelerate implementation of energy efficiency, clean energy, and renewable energy;
- a legally binding international climate change treaty;
- support for the development of the Green Climate Fund and other funds to assist developing countries to address climate change; and
- increased efforts to reduce deforestation.