For this reason, investors urge governments to request that the FSB seek to incorporate the TCFD recommendations into its guidelines<\/b>
\nBriefing Paper on the 2018 Global Investor Statement to Governments on Climate Change
This Briefing Paper accompanies the 2018 Global Investor Statement to Governments on Climate Change. It has been prepared by seven investor organizations including the Asia Investor Group on Climate Change (AIGCC, Asia), CDP, Ceres (North America), the Investor Group on Climate Change (IGCC, Australia\/New Zealand), the Institutional Investor Group on Climate Change (IIGCC, Europe), Principles for Responsible Investment (PRI) and the UN Environment Finance Initiative (UNEP FI). These groups collectively represent hundreds of investors worldwide with trillions of dollars in assets under management.
Q3 hedge fund letters, conference, scoops etc
Institutional investors have a responsibility to manage and protect the assets of millions of savers and individuals worldwide, including from the effects of climate change. Investors also manage large pools of long-term capital and play a crucial role in financing the transition to a low carbon, more climate resilient, economy. To this end, investors urge governments to update and strengthen their climate-related policies to accelerate and expand further investment flows.
Investors are concerned that the implementation of the Paris Agreement is currently falling well short of the agreed goal of \u201cholding the increase in the global average temperature to well below 2\u00b0C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5\u00b0C above pre-industrial levels.\u201d This gap not only increases the physical risks from climate change for current and future generations, but also heightens economic and policy uncertainty and hampers investors\u2019 ability and willingness to continue to properly allocate the trillions of dollars that are needed to support the low carbon transition process.
This briefing paper provides recommendations to governments on the specific steps that investors believe are needed to support a smooth and just transition to a low carbon, more climate resilient, economy. It focuses on three major areas for government action: 1) Achieve the Paris Agreement\u2019s goals, 2) Accelerate private sector investment into the low carbon transition and 3) Commit to improve climate-related financial reporting.
Investors call on global leaders to:
Investors remain firmly committed and ready to work with government leaders to implement these actions.
The implementation of the Paris Agreement that came into force in November 2016 is currently falling well short of the agreed goal of \u201cholding the increase in the global average temperature to well below 2\u00b0C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5\u00b0C above pre-industrial levels.\u201d Indeed, the full implementation of current Nationally Determined Contributions (NDCs) would lead to an unacceptably high temperature increase, potentially in the range of 2.9 to 3.4\u00b0C relative to pre-industrial levels1.
This is of great concern for investors, as global warming at that scale would have large and detrimental impacts on global economies, society and investment portfolios, now and into the future2. Policy makers need to close this gap urgently.
Policies that support the attainment of the Paris Agreement\u2019s goals will provide the private sector with greater certainty as to governments\u2019 commitment to tackling climate change. This will, in turn, affect investors\u2019 ability to assess climate-related risks and opportunities, to measure and disclose portfolio exposure to the low carbon transition and physical climate impacts, and to further invest in opportunities to support a low carbon, more climate resilient, world.
With that in mind, investors recommend that global leaders:
i. Update and strengthen nationally-determined contributions to meet the goals of the Paris Agreement, starting the process now in 2018 and completing it no later than 2020, and focusing swiftly on implementation \u2013 There is an ambition gap to the goal of the Paris Agreement that needs to be closed with urgency.
ii. Formulate and communicate long-term emission reduction strategies in 2018 — Investors welcome the announcement by some nations to publish or commit to developing mid-century, long-term, emission reduction strategies as part of their commitment to the Paris However, many governments are yet to submit their long-term strategies, with only a small number revealing their plans out to 20505. Investors urge all nations that have not already done so to submit mid-century, long-term emission reduction strategies this year.
iii. Align all climate-related policy frameworks holistically with the goals of the Paris Agreement \u2013 Investors urge and reaffirm the need for nations to strive for greater consistency across policy mechanisms to support the attainment of the Paris Agreement goals.
iv. Support a just transition to a low carbon economy \u2013 Investors encourage governments to transition to a low carbon economy in a sustainable and economically inclusive As stated in the Paris Agreement, this must include \u201cthe creation of decent work and quality jobs in accordance with nationally defined development priorities\u201d, by providing appropriate support for workers and communities in industries undergoing transition8. Additionally, governments should work with investors to ensure that the benefits and opportunities created by acting on climate change and the increased adoption of clean energy technologies are accessible to all9.
Investors are taking action on climate change by making significant investments into the low carbon economy across a range of asset classes10. Investors are also increasingly incorporating climate change scenarios and climate risk management strategies into their investment processes11 and engaging with high-emitting companies12.
Despite these efforts, it is widely acknowledged that there is a clear and pressing need to scale up financial flows to support the low carbon transition process13. A recent survey of institutional investors identified policy uncertainty as one of the key obstacles to accelerating investments into low carbon and climate resilient opportunities14.
To strengthen investor confidence to further invest in the low carbon economy, it is vital that global policy makers deliver strong and continued support for climate action, including through incorporating Paris-aligned climate scenarios into all relevant policy frameworks and energy transition pathways, putting a meaningful price on carbon, phasing out fossil fuel subsidies by set deadlines and phasing out thermal coal power worldwide by set deadlines.
Against that backdrop, investors encourage global leaders to take the following actions:
i. Incorporate Paris-aligned climate scenarios into all relevant policy frameworks and energy transition pathways \u2013 Investors encourage governments to work closely together in consultation with businesses and investors to incorporate Paris-aligned climate scenarios into their policy frameworks and energy transition pathways.
ii. Put a meaningful price on carbon \u2013 Investors reiterate the need for governments to provide stable, reliable and economically meaningful carbon pricing to help redirect investment commensurate with the scale of the climate change challenge. Carbon pricing will level the playing field for low carbon technologies and more adequately reflect the costs of climate-related externalities. Market-based mechanisms are most effective when supported by complementary mechanisms such as public procurement measures, regulations, energy targets, carbon performance and energy efficiency standards.
iii. Phase out fossil fuel subsidies by set deadlines \u2013 Investors are concerned about the continued existence of subsidies and public finance that support the production and consumption of fossil fuels.
iv. Phase out thermal coal power worldwide by set deadlines \u2013 Investors are concerned about the continued expansion of traditional thermal coal power stations in some jurisdictions that puts the attainment of the Paris Agreement goals at risk.
One of the essential ingredients for investors to manage the transition to a low carbon economy effectively is having access to reliable, consistent and comparable information about climate- related risks and opportunities. If short-, medium- and long-term climate risks are not fully evaluated and disclosed, ill-informed investment and corporate decisions will drive up the cost of the transition for policy-makers, investors, businesses and \u2013 ultimately \u2013 for consumers and communities.
To this end, investors welcome the recommendations of the Financial Stability Board\u2019s (FSB) Task Force on Climate-related Financial Disclosures (TCFD) and are taking practical steps to assist their implementation around the world29. The TCFD provides global recommendations on climate-related financial disclosures, including four widely adoptable principles that are applicable to organizations across sectors and jurisdictions30. The TCFD has been endorsed by over 238 companies, including 150 financial institutions representing a combined market capitalization of over US$6 trillion and US$81.7 trillion assets under management.
In order for the TCFD to be effective, it is vital that governments commit to improve climate- related financial reporting standards by publicly supporting the adoption of the TCFD recommendations and the extension of its term beyond September 2018.
Investors encourage global leaders to support continued improvement in the quality and uptake of climate-related financial reporting through the following actions:
I. Publicly support the Financial Stability Board\u2019s Task Force on Climate- related Financial Disclosures (TCFD) recommendations and the extension of its term \u2013 Investors believe this would reaffirm the importance of the TCFD recommendations across the regulatory, business and investment communities.
II. Commit to implement the TCFD recommendations in their jurisdictions, no later than 2020 \u2013 Investors believe this would enhance the availability of consistent, comparable and reliable disclosure of climate-related financial information for investors.
III. Request the FSB incorporate the TCFD recommendations into its guidelines
IV. Request international standard-setting bodies incorporate the TCFD recommendations into their standards \u2013 Investors believe this would help to solidify and normalise the disclosure of climate-related financial information across the financial sector, as well as provide direction for national regulators as they interpret and respond to the recommendations.
The need for governments to close the national commitments gap to achieve the goals of the Paris Agreement is pressing \u2013 as is the need to swiftly implement the right enhanced policy mechanisms and frameworks to support the low carbon transition process in closing this gap. Investors encourage governments to take action across the three areas as set out in this briefing paper, including updating and strengthening NDCs, accelerating private sector investment into the low carbon transition and committing to improve climate-related financial reporting in their jurisdictions.
Investors are committed to working with governments to ensure that the appropriate policy mechanisms are successfully developed and implemented to help mitigate the adverse effects of climate change and accelerate the transition to a low carbon economy.
2018 GLOBAL INVESTOR STATEMENT TO GOVERNMENTS ON CLIMATE CHANGE
This statement is signed by 415 investors representing over USD $32 trillion in assets.
As institutional investors with millions of beneficiaries around the world, we reiterate our full support for the Paris Agreement [link] and strongly urge all governments to implement the actions that are needed to achieve the goals of the Agreement, with the utmost urgency.
Investors are taking action on climate change. The global shift to clean energy is underway, but much more needs to be done by governments to accelerate the low carbon transition and to improve the resilience of our economy, society and the financial system to climate risks. Investors continue to make significant investments into the low carbon transition across a range of asset classes. Investors are also increasingly incorporating climate change scenarios and climate risk management strategies into their investment processes and engaging with high-emitting companies. To build on this momentum and maintain investor confidence to further shift investment portfolios, it is vital that policy makers are firmly committed to achieving the goals of the Paris Agreement.
We are concerned that the implementation of the Paris Agreement is currently falling short of the agreed goal of \u201cholding the increase in the global average temperature to well below 2\u00b0C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5\u00b0C above pre-industrial levels.\u201d There is an ambition gap: the full implementation of current Nationally Determined Contributions (NDCs) would lead to an unacceptably high temperature increase that would cause substantial negative economic impacts.
This ambition gap is of great concern to investors and needs to be addressed, with urgency. It is vital for our long-term planning and asset allocation decisions that governments work closely with investors to incorporate Paris-aligned climate scenarios into their policy frameworks and energy transition pathways.
In addition, investors need companies to report reliable and decision-useful climate-related financial information to price climate-related risks and opportunities effectively. That is why we welcome the recommendations of the Financial Stability Board\u2019s (FSB) Task Force on Climate-related Financial Disclosure (TCFD) and are taking practical steps to assist their implementation around the world. In order for the TCFD to be effective, it is vital that governments commit to improve climate-related financial reporting standards by publicly supporting the adoption of the TCFD recommendations and the extension of its term beyond September 2018.
The countries and companies that lead in implementing the Paris Agreement and enacting strong climate and low carbon energy policies will see significant economic benefits and attract increased investment that will create jobs in industries of the future. To ensure a smooth and just transition to a low carbon economy and to adapt to the warming already locked in to the climate system, it will be important that the benefits of gaining access to cleaner energy sources are shared by all, and that those workers and communities affected by the transition are supported.
With these principles in mind, we call on global leaders to:
Stability Board\u2019s Task Force on Climate-related Financial Disclosures (TCFD) recommendations and the extension of its term \u25a0 Commit to implement the TCFD recommendations in their jurisdictions, no later than 2020 \u25a0 Request the FSB incorporate the TCFD recommendations into its guidelines \u25a0 Request international standard-setting bodies incorporate the TCFD recommendations into their standards.
We stand ready to work with government leaders in implementing these actions.
Signed,
Note: The following 454 investor signatories with well over $32 trillion in assets are listed in alphabetical order by organisation name:
27four
Aalto University Foundation
Aargauische Pensionskasse (APK)
Aberdeen Standard Investments
ABP
Achmea Investment Management
ACTIAM
Addenda Capital Inc.
Adrian Dominican Sisters, Portfolio Advisory Board Aegon N. V.
AGF Investments Inc.
Aktia Bank Plc
Alberta Investment Management Corporation (AIMCo)
Alecta
Allianz Global Investors
Allianz SE
Alquity Investment Management Limited
Alternative Capital Partners Srl
AMF
Amundi
Andra AP-fonden (AP2)
AP3 Third Swedish National Pension Fund
AP4
AP6 (Sj\u00e4tte AP-fonden)
AP7
APG
Aquila Capital
Archbishops’ Council
Ardevora Asset Management LLP
Arjuna Capital
Armstrong Asset Management
As You Sow
ASN Bank
ATLAS Infrastructure
ATP
Ausbil Investment Management Ltd
Australian Ethical Investment
Australian Super
Avaron Asset Management
Avesco Financial Services AG
Aviva Investors
Aviva plc
AXA Investment Managers
Baillie Gifford & Co
Baldwin Brothers
Bank J. Safra Sarasin
Barings LLC
Barncancerfonden
B\u00e2tirente
BBC Pension Trust
BBVA
Bedfordshire Pension Fund
Bernische Lehrerversicherungskasse
BMO Global Asset Management
BNP Paribas Asset Management
Boston Common Asset Management
Brawn Capital Limited
Bridges Fund Management Limited
Brunel Pension Partnership
BT Financial Group
Bullitt Foundation
Caisse de d\u00e9p\u00f4t et placement du Qu\u00e9bec (CDPQ)
Caisse de pensions de l’Etat de Vaud (CPEV)
Caisse de pensions ECA-RP
Caisse de Pr\u00e9voyance de l’Etat de Gen\u00e8ve (CPEG)
Caisse de Pr\u00e9voyance des Interpr\u00e8tes de Conf\u00e9rence (CPIC)
Caisse intercommunale de pensions (CIP)
Caisse paritaire de pr\u00e9voyance de l’industrie et de la construction (CPPIC)
Caja Ingenieros Gesti\u00f3n
California Public Employees’ Retirement System
California State Controller
California State Teachers’ Retirement System
California State Treasurer’s Office
Calvert Research and Management
Candriam Investors Group
CAP Pr\u00e9voyance
Capricorn Investment Group
CareSuper
Carnegie Fonder
Cathay Financial Holdings
Catholic Health Initiatives
Catholic Super
Cbus
CCAP Caisse Cantonale d’Assurance Populaire
CCLA
CCOO, FP
Central Finance Board of the Methodist Church
Christian Super
Christopher Reynolds Foundation
Church Commissioners for England
Church Investors Group
Church Of England Pensions Board
Church of Sweden Asset Management
CIEPP — Caisse Inter-Entreprises de Pr\u00e9voyance Professionnelle
City Developments Limited
CM-CIC Asset Management
Colonial First State Global Asset Management
Cometa Fondo Pensione
COMGEST
Committee on Mission Responsibility Through Investment of the Presbyterian Church U. S. A. Common Interests
Conference for Corporate Responsibility Indiana And Michigan Congregation of St. Joseph
Connecticut Retirement Plans and Trust Funds
Connecticut State Treasurer
CPEG
CPR AM
Credito Valtellinese S.p. A.
CRF For Local Government
Dana Investment Advisors
Danske Bank Wealth Management
Daughters of Charity, Province of St. Louise
Davy Asset Management
Dignity Health
Domini Impact Investments LLC
Dominican Sisters of Hope
Dominican Sisters of Sparkill
Dragon Capital Group
DSM Capital Partners LLC
DWS
Earth Capital Partners
East Capital
Ecofi Investissements
Ecofin Limited
EdenTree Investment Management
Edmond de Rothschild Asset Management (France)
EGAMO
Elo Mutual Pension Insurance Company
Encourage Capital
Environment Agency Pension Fund
Epic Capital Wealth Management
Epworth Investment Management
eQ Asset Management Ltd
ERAFP
Essex Investment Management, LLC Etablissement Cantonal d’Assurance (ECA VAUD) Ethos Foundation
Everence and the Praxis Mutual Funds
EverWatch Financial
Evli Bank
Felician Sisters of North America
FIM Asset Management
Finance in Motion
First Affirmative Financial Network
First State Super
FMO — Dutch Development Bank
Fondation de la m\u00e9tallurgie vaudoise du b\u00e2timent (FMVB) Fondation de pr\u00e9voyance du Groupe BNP PARIBAS en Suisse Fondation Leenaards, Switzerland
FONDO DE PENSIONES EMPLEADOS DE TELEFONICA Fonds de R\u00e9serve pour les Retraites — FRR F\u00f6rsta AP-fonden (AP1)
Franciscan Sisters of Allegany NY
Friends Fiduciary Corporation
Frontier Advisors
Funda\u00e7\u00e3o VIVA DE PREVID\u00caNCIA
GAM Investments
Generate Capital, Inc.
Generation Investment Management LLP
Glennmont Partners
GOOD GROWTH INSTITUT f\u00fcr globale Verm\u00f6gensentwicklung mbH
Greater Manchester Pension Fund
Green Century Capital Management
Greentech Capital Advisors
Handelsbanken Asset Management
Hermes Investment Management
HESTA
Hexavest
HSBC Bank UK Pension Scheme
HSBC Global Asset Management
ICCR (Interfaith Center on Corporate Responsibility)
IFM Investors
Illinois State Treasurer Michael Frerichs
Impact Investors
Impax Asset Management
Industriens Pension
Inherent Group
Insight Investment
INTERAMERICAN
Investec Asset Management
Investment Management Corporation of Ontario (IMCO)
IRCANTEC
Jantz Management LLC
Janus Henderson
JLens Investor Network
Joseph Rowntree Charitable Trust
Kames Capital
KBIGI
Kempen Capital Management
Kendall Sustainable Infrastructure, LLC
La Banque Postale
La Fran\u00e7aise Group
Labour Union Co-operative Retirement Fund (LUCRF Super)
L\u00e6gernes Pension — pensionskassen for l\u00e6ger
Legal & General Investment Management
Legato Capital Management, LLC
LGPS Central Limited
Local Authority Pension Fund Forum
Local Government Super
Local Pensions Partnership
LocalTapiola Asset Management Ltd
Logos Asset Management
London Pensions Fund Authority
Los Angeles County Employees Retirement Association (LACERA)
M&G Investments
Macroclimate LLC
MAIF
Manulife
Maryknoll Sisters
Maryland Province of the Society of Jesus
Maryland State Treasurer Nancy Kopp
McKnight Foundation
Meeschaert Asset Management
Mennonite Education Agency
Mercer Investments
Merck Family Fund
Mercy Health
Mercy Investment Services, Inc.
Merseyside Pension Fund
MFS Investment Management
Midwest Coalition Responsible Investment
Miller\/Howard Investments, Inc.
Minnesota State Board of Investment
Mirabaud
Mirova
Mitsubishi UFJ Kokusai Asset Management Co.,LTD.
Mitsubishi UFJ Trust & Banking Corporation
MN
Montanaro Asset Management Ltd
Morphic Asset Management
MPC Renewable Energies GmbH
MP Pension
Munich Venture Partners
Nanuk Asset Management
Natixis Assurances
Natixis Investment Managers
Natural Investments
NEI Investments
Nephila Capital Ltd
NEST
Nest Sammelstiftung, Switzerland
Neuberger Berman
Neumeier Poma Investment Counsel, LLC
New Forests
New York City Comptroller
New York State Comptroller
Newton Investment Management
Nikko Asset Management
NN Investment Partners Nomura Asset Management Nordea
Nordea Asset Management
North East Scotland Pension Fund
Northern Ireland Local Government Officers’ Superannuation Committee NorthStar Asset Management, Inc.
Northwest Coalition for Responsible Investment
OFI AM \u00d6hman
Old Mutual Global Investors
Ontario Teachers\u2019 Pension Plan
OPTrust
Oregon State Treasurer Tobias Read Ownership Capital P+(DIP\/JOEP)
P1 Investment Management Limited P\u00e6dagogernes Pension
Palisade Investment Partners Parnassus Investments Pathfinder Asset Management Pegasus Capital Advisors, L. P. PenSam PensionDanmark
Pensions Caixa 30
Pensionskasse Caritas, Switzerland Pensionskasse der Stadt Winterthur, Switzerland Pensionskasse Stadt Luzern, Switzerland Pensionskasse Unia, Switzerland
Permian Global PFA Pension
PGGM PHITRUST Pictet Group
PKA A\/S PME
PMT (Pensioenfonds Metaal & Techniek) Polaris Capital Group Co., Ltd. Polden-Puckham Charitable Foundation Pr\u00e9voyance Sant\u00e9 Valais (PRESV), Switzerland pr\u00e9voyance.ne, Switzerland
Priests of the Sacred Heart, US Province Princeville Global
Pro BTP Finance
Profelia Fondation de pr\u00e9voyance, Switzerland
Progressive Asset Management
Progressive Investment Management
Prosperita Stiftung f\u00fcr die berufliche Vorsorge, Switzerland
PT. ASABRI (Persero)
RAM Active Investments
Rathbone Greenbank Investments
R\u00e9gime de retraite de l’Universit\u00e9 de Montr\u00e9al
Region VI Coalition for Responsible Investment
Regroupement pour la Responsabilit\u00e9 Sociale des Entreprises (RRSE)
Retraites Populaires, Switzerland
Reynders, McVeigh Capital Management, LLC
Riverwater Partners LLC
Robeco
RobecoSAM
Rockefeller Capital Management
Rose Foundation for Communities and the Environment Royal London Asset Management RPMI Railpen
RS Group
Ruffer LLP
Sampension A\/S
San Francisco Employees’ Retirement System (SFERS)
Santander Empleados Pensiones, F. P.
Sarasin & Partners LLP
SBI Funds Management Private Limited
Schroders plc
Seamans Capital Management, LLC
Seattle City Employees’ Retirement System
SEB Investment Management
Seventh Generation Interfaith Inc.
Shareholder Association for Research & Education (SHARE
Sinsinawa Dominincans Inc.
Sisters of Bon Secours USA
Sisters of St. Dominic of Caldwell
Sisters of St. Francis of Philadelphia
Sisters of the Presentation of the BVM of Aberdeen SD SLM Partners Australia
Socially Responsible Investment Coalition
Solaris Investment Management
Solothurnische Geb\u00e4udeversicherung, Switzerland
Sophia School Corporation
South Yorkshire Pensions Authority
St. Galler Pensionskasse, Switzerland
Stafford Capital Partners
State of New Mexico — Treasurer’s Office
Statewide Super
Steyler Ethik Bank
Stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid Stichting Pensioenfonds Openbaar Vervoer
Stichting Pensioenfonds voor de Woningcorporaties Stichting Personeelspensioenfonds APG Stichting Spoorwegpensioenfonds Stiftung Abendrot, Switzerland
Storebrand Asset Management AS
Strathclyde Pension Fund
Sumitomo Mitsui Trust Bank
Superannuation Arrangements of the University of London (SAUL)
Sustainable Technology Investors Ltd
Sustainasia Limited
SWEN Capital Partners
Swift Foundation
Sycomore Asset Management
Terra Alpha Investments
Terre des hommes, Switzerland
The Atmospheric Fund
The Barrow Cadbury Trust
The George Gund Foundation
The London Borough of Islington Council
The Maryland State Retirement and Pension System The Osiris Group
The Presbyterian Church in Canada
The Sustainability Group of Loring, Wolcott & Coolidge
The Swedish Foundation for Strategic Environmental Research, Mistra
The Tellus Mater Foundation
Thomson Horstmann and Bryant, Inc.
TOBAM
TPT Retirement Solutions
Transport for London Pension Fund
Tri-State Coalition for Responsible Investment
Trillium Asset Management
Trilogy Global Advisors, LP
Trinity Health
Triodos Investment Management
Trusteam Finance
TT International
UBS Asset Management
Union Bancaire Priv\u00e9e, UBP SA
Union Investment
Union Mutualiste Retraite
Unipol Gruppo
UNISON Staff Pension Scheme
Unitarian Universalist Association
United Church Funds
United Methodist Women
Universit\u00e9 de Montr\u00e9al (Fonds de dotation)
Universities Superannuation Scheme — USS
University of California
University of Toronto Asset Management
Univest Company (Unilever Pension Funds)
Ursuline Sisters of Tildonk, U. S. Province
USA Northeast Province of the Society of Jesus
Vancity Investment Management Ltd.
Varma Mutual Pension Insurance Company
VBV — Vorsorgekasse AG
Veritas Pension Insurance Company
Vermont Pension Investment Committee
Vermont State Treasurer Elizabeth Pearce
Vert Asset Management
VicSuper
Vision Super Pty Ltd
Vontobel
Walden Asset Management\/Boston Trust & Investment Management
Water Asset Management LLC
Washington State Investment Board
Wermuth Asset Management GmbH
Wespath
West Midlands Pension Fund
West Yorkshire Pension Fund
Wetherby Asset Management
WHEB Asset Management
Zevin Asset Management
Zurich Insurance Group<\/p>\n