The top United Nations climate change official is calling on investors to move out of high-carbon assets and green their portfolios as a crucial step towards a low-carbon economy that can better cope with the threats of climate change.
Specifically, Christiana Figueres called on investors to move into assets built on renewable energy, energy efficiency and more sustainable ways of business that green global supply chains.
“The pensions, life insurances and nest eggs of billions of ordinary people depend on the long-term security and stability of institutional investment funds. Climate change increasingly poses one of the biggest long-term threats to those investments and the wealth of the global economy,” said Ms. Figueres, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC).
“Institutional investors who ignore the risk face being increasingly seen as blatantly in breach of their fiduciary duty to their beneficial owners – men and women who have worked hard all their lives to put away something for their retirement and for their children,” she said.
Ms. Figueres also called on investors to ask the companies they are invested in to not use shareholder funds to influence policy against climate change. Ignorance of climate change impact on any investment portfolio is no longer an excuse, she added.
According to the International Energy Agency, $36 trillion of global investment in clean energy will be required by 2050 to meet the internationally agreed goal of limiting global temperature rise to less than 2 degrees Celsius. This means the world needs to invest an average of $1 trillion per year in clean energy for the next 36 years.
“The continued and dangerous rise in greenhouse gases in the atmosphere is in large part the direct result of past investments in energy and mobility systems based on the use of fossil fuels,” noted Ms. Figueres. “New investments must now assist in reversing this unsustainable trend, and quickly if the world is to have a chance of staying under a 2 degree Celsius temperature rise.”