Investors urge a ‘whole-of-government approach’ to tackle the climate crisis

Announced on Tuesday (17^th September) the 2024 ‘Global Investor Statement to Governments on the Climate Crisis’ has been signed by 534 institutional investors and their representatives, who together manage more than $29 trillion in assets.

In a press release, the investor statement calls for the enactment of policies that will unlock the private capital flows needed for a just transition to a climate-resilient and nature-positive, net-zero economy. Further, they call on governments to up the ambition of their Nationally Determined Contributions (NDCs), which are due to be submitted next year as part of on-going commitments to the Paris Agreement.

To reach the goal of a climate-resilient, net zero emissions economy by 2050 or sooner, the statement asks for governments to enact policies across five critical policy groupings. These are as follows: 

1.       enacting economy-wide public policies; 

2.       implementing sectoral strategies, especially in high-emitting sectors; 

3.       addressing nature, water and biodiversity-related challenges contributing to and stemming from the climate crisis; 

4.       mandating climate-related disclosures across the financial system; and 

5.       facilitating further private investment into climate mitigation, resilience and adaptation activities in emerging markets and developing economies.  

The press release reads: “Investors recognize that policy mechanisms are essential to achieve a climate-resilient, net zero emissions economy by 2050 or sooner, with interim targets in line with credible 1.5°C pathways. Non Policy mechanisms, including public-private partnerships, sectoral strategies, and other collaborative efforts, should also play an important role in decarbonizing value chains and building out resilient electricity infrastructure.”[i]

The statement has been coordinated by the Founding Partners of the Investor Agenda which included Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment, and UNEP Finance Initiative, all of whom have been leading calls for governments to step up climate policy action since 2009. 

Investors have until 1^st November 2024 to sign the statement, ahead of COP 29 which is set to run from the 11^th – 22^nd November 2024 in Baku, Azerbaijan.

Finance set to take centre stage at COP 29

As COP 29 looms on the horizon, climate related finance looks set to take centre stage. The main task for the summit is for consensus between nations on an annual funding target, with this to be paid by wealthier nations to support poorer countries in meeting their emissions targets.

Presently it is reported that countries remain far from agreement on the financing goal, with the COP29 presidency instead outlining numerous side initiatives that could raise ambitions but do not require party negotiation and building consensus which can hamper progress. These take the form of new funds, pledges, and declarations that national governments can adopt.

Mukhtar Babayev, who holds the rotating COP presidency, stated in a letter to all parties and stakeholders that such side agendas use "the convening power of COP and the hosts’ respective national capabilities to form coalitions and drive progress. They have confronted the most pressing problems, shone a light on forgotten priorities, and offered unique solutions based on the experiences and perspectives of the host."[ii]

With more than 120 countries pledging to triple renewable energy capacity by 2030 at COP 28 last year, the COP29 presidency also hopes to build support around a pledge to increase global energy storage capacity six times above 2022 levels, reaching 1,500 gigawatts by 2030. This would include a commitment to scale up investments in energy grids, adding or refurbishing more than 80 million km (50 million miles) by 2040.

References

[i] 17 September 2024 | The Investor Agenda

[ii] COP29_Letter_to_Parties.pdf (unfccc.int)

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