Cambridge Judge Business School alumnus Martin Schoenberg (Cambridge MBA 2012) writes from the Paris climate conference for the Institutional Investors Group on Climate Change. The organisation represents investors with more than €13 trillion of assets under management. Never before has the investment world been more engaged in climate change, and never before has an agreement been within such close reach.
UK insurance company Aviva recently released a report showing that more than €13 trillion of the world’s manageable assets are at risk from climate change. The stakes could not be higher for long-term investors at the Paris climate conference that will decide on a new international legally binding agreement before the end of next week.
Investors have stepped up their advocacy for a global climate agreement. More than 400 investors with more than US$24 trillion of assets under management are now supporting the global investor statement on climate change calling for a strong climate agreement. Before the G7 summit in Elmau, Germany, more than 120 CEOs of investment funds wrote to finance ministers to lend their support for a global decarbonisation goal – which Heads of State and Government ultimately adopted in their final communique.
The UN climate negotiations still understand investment in the narrow sense of climate finance (which negotiators define as increased flows of climate investment from OECD countries to the rest of the world). But the positive impact investors can have on the outcome of the negotiations, and more importantly, on the trillions of new investment that is required in order to deliver the low-carbon transition, is increasingly being understood in the negotiation halls.
Today (3 December 2015) the CEOs of the world’s largest investors are in Paris to give their perspective on the policy measures required to catalyse the investment required to implement the Paris agreement. With much of the world’s capital still sitting idle, there is increasing appetite amongst institutional investors to invest in climate-friendly infrastructure. We may not only have a unique moment in terms of political will. We also have a unique opportunity to stimulate the investment the world needs for climate protection reasons – and to create sustainable growth.