Investors warn climate change is putting pensions at risk

An alliance of the world’s largest institutional investors has today warned the pensions and investments of millions of people will be at risk unless governments across the world boost investment in low carbon technologies and adopt ambitious emissions reduction targets.

Companies including the Co-operative, BlackRock and Aviva are among the coalition whose members are responsible for managing $22.5tr in assets.

The group has written to the governments of the world’s largest economies, including the UK, US, China and India, calling for “a new dialogue between investors and governments on climate policy”.

“Current policies are insufficient to avert serious and dangerous impacts from climate change,” the letter says. “Further delay in implementing adequately ambitious climate and clean energy policy will increase investment risk for institutional investors and jeopardise the investments and retirement savings of millions of citizens.”

The letter says the right mix of regulations will encourage institutional investors to increase their stake in clean technologies and energy efficiency and shift many economies’ reliance away from coal and gas.

This mix includes clear emissions reduction targets in the short, medium, and long term, time tables for these milestones, and enforceable legal mechanisms and incentives to accelerate the shift away from high carbon investment.

Chris Davis, director of investor programmes at Ceres, a US-based coalition of investors and green groups, and a representative of Investor Network on Climate Risk, said strong carbon-reducing government policies are “an urgent imperative”.

“Hurricane Sandy, which caused more than $50bn in economic losses, is typical of what we can expect if no action is taken and warming trends continue,” he added. “Investors are rightly concerned about the short and long-term economic risks of climate change and understand that ambitious climate and clean energy policies are urgently needed to avoid catastrophic impact.”

The letter comes as the debate rages in government over whether to insert a decarbonisation target for the country’s power sector in the forthcoming Energy Bill, an idea that Chancellor George Osborne is said to oppose.

Businesses are also looking to make their voices heard ahead of next week’s Doha climate summit.

Another letter issued yesterday by 100 of the world’s largest companies urged governments to establish a global price for carbon to help drive clean energy investment.

Meanwhile, business leaders from Danfoss, Philips, Schneider Electric, Knauf Insulation, 1E and Kingspan today called on EU climate commissioner Connie Hedegaard to set a binding energy saving target in its 2030 Energy and Climate framework.

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