In one of the boldest actions yet by the world’s largest investors to decarbonize the global economy, an alliance of the world’s largest pension funds and insurers – responsible for directing more than US$ 2.4 trillion in investments – has today committed to carbon-neutral investment portfolios by 2050.
This commitment by the newly launched, United Nations-convened Net-Zero Asset Owner Alliance was announced today at the UN Secretary-General’s Climate Action Summit, which brought together governments, companies and civil society to strengthen commitments and accelerate the implementation of the Paris Agreement on Climate Change.
The Net-Zero Asset Owner Alliance is an example of investors stepping up to protect people and planet with the knowledge that companies that transform their businesses to deliver a low carbon economy will benefit most from the opportunities presented by climate change.
Inger Andersen, Executive Director of the UN Environment Programme (UNEP) said, “There are no short-cuts to decisive climate action. We need to take a long-term view. I applaud the leadership of the investors in this Alliance. Their commitment sends a strong signal that financial markets and investors are listening to science, and moving us to a path of resilience and sustainability.”
Asset owners – so called because they are the principal holders of retirement savings or are insurance companies investing their customers’ premiums – represent some of the largest pools of capital on the planet. Their investment portfolios are highly diversified and exposed to all sectors of the global economy.
Concerned about the disruptive impacts that unabated climate change will have on societies and economies, now and in the future, responsible asset owners are powerful allies in global action to fight climate change and limit the rise in global temperature to no more than 1.5°C warming.
As long-term investors who must look far into the future to fund their liabilities, asset owners are keen to ensure that the global economy prospers, that climate-related risks are addressed, and that opportunities to invest in a cleaner tomorrow are captured.
The Alliance was initiated by Allianz, Caisse des Dépôts, La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark and Swiss Re at the beginning of 2019. Since then, Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand, and Zurich have joined as founding members.
Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment, the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Christiana Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).
“Mitigating climate change is the challenge of our lifetime. Politics, business and societies across the globe need to act as one to rapidly reduce climate emissions. We, as asset owners, will live up to our responsibility and, in dialogue with the companies in which we invest, steer towards low-carbon business practices. We’ve already started and, by 2050, our portfolios will be climate neutral,” said Oliver Bäte, Allianz’s CEO.
The members of the Alliance will immediately start to engage with the companies in which they are investing to ensure they decarbonise their business models. Initiatives such as the UN Global Compact “Business Ambition for 1.5°C — Our Only Future” campaign will be a clear partner in mobilising corporations to commit to net zero emissions. The Alliance will also collaborate with other initiatives, such as the Investor Agenda, Science Based Targets initiative, Climate Action 100+, and the newly announced 2050 Ambition Alliance.
The members of the Alliance will hold themselves publicly accountable on their progress by setting and publicly reporting on intermediate targets in line with Article 4.9 of the Paris Agreement. By committing to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050, asset owners are significantly raising the bar for other investors, industry associations and, importantly, the global economy.
“The Net-Zero Alliance is the recognition that institutional investors collectively have an important role to play in fostering the energy transition the world needs. For investors like CDPQ, there are so many opportunities to earn commercial returns by investing in low-carbon solutions and to work with portfolio companies to decarbonize,” said CDPQ CEO, Michael Sabia. “Combined with the necessary changes in public policies, investors’ actions will induce real change in every sector.”
To have maximum impact, existing Alliance members actively encourage additional asset owners to join them in their quest to decarbonise investment portfolios and achieve net zero emissions by 2050.
Kenyan students learn about environmental law
In our globalized world, environmental threats require effective responses that promote peace, justice, development and the fulfilment of environmental and human rights. This is the responsibility of everyone; and we all have the right to be involved. We are all the leadership that the planet needs.
That’s what a group of Kenyan students were told in October 2019 when they participated in a lecture at the UN Environment Programme (UNEP) on international environmental law.
UNEP promotes a shared sense of environmental governance by building the capacity of those who affect the rules, policies and institutions that shape how humans interact with the environment.
UNEP experts spoke to students on basic governance and enforcement of international environmental law. International environmental law can involve many countries, as it does with the Paris Agreement, or a few countries, such as a regional environmental treaty. Sources of international environmental law can cover varied goals, such as the Convention on Biological Diversity, or be specific to a certain issue, such as the Agreement on the Conservation of Albatrosses and Petrels. We need international environmental law because many environmental problems are transboundary, regional or global in scope, and solutions require international cooperation and the adoption of common standards.
The students and UNEP experts deliberated over the weaknesses and strengths of international environmental laws and discussed how students could get more involved in tackling the issues. Students described the lecture as very useful and said that they were challenged to think of new and different aspects of environmental law.
Topics discussed included the divergent responsibilities of various groups regarding environmental governance and biotechnology, the principle of common but differentiated responsibility, and plastic pollution and lessons from the plastic ban in Kenya.
To ensure that this learning continues outside the lecture theatre, the UNEP team shared learning resources with the students.
James Nyaro, a lecturer at the Kenyatta University, said on behalf of the institution: “You let us ask you questions… and responded to them comprehensively… and we cannot thank you enough.”
What should I know about international environmental law?
When states work together to create and implement international environmental law, great things can be achieved. The ozone layer is currently on track to heal completely in our lifetime and this will save two million people each year by 2030 from skin cancer. This success is due to international environmental law through the Montreal Protocol: an environmental treaty.
As everyone has the right to be involved in environmental management, we should all have a basic understanding of the laws that govern us. Countries are individually responsible for deciding and applying international environmental laws, yet the average citizen can be far removed from the processes involved in their development and implementation. As citizens, we should influence the progression and enforcement of international environmental law to ensure that it effectively tackles the issues we face. UNEP encourages everyone to learn what international environmental laws apply to their states through InforMEA. Knowledge is the first step towards creating environmental laws that work for us.
On 23 October 2019, postgraduate students from the School of Security, Diplomacy and Peace Studies at Kenyatta University were introduced to international environmental law by UNEP experts.
Climate change: Scientists warn over impact on food security and oceans
UN climate scientists presented MEPs with new evidence on how climate change is affecting food production and oceans.
The Intergovernmental Panel on Climate Change is the United Nations body for assessing the science related to climate change. In August, it presented a report on climate change and land and in September one on the oceans and cryosphere in a changing climate. The reports are the latest scientific input for the UN climate summit COP25 to be held in Madrid in December.
The scientists behind the reports presented their findings to Parliament’s environment, development and fisheries committees on Wednesday 6 November.
Food production and climate change a two-way street
Professor Jim Skea told MEPs climate change was exacerbating land degradation, such as erosion and pollution, which in turn affects infrastructure and people’s livelihoods. Better land management can help tackle climate change but it must be complemented by other action, he added.
Dr Jean-François Soussana noted that the food system accounts for between a fifth and a third of all greenhouse gas emissions caused by humans. At the same time, climate change affects food security through declining crops of wheat and maize. He warned that in future the stability of our food supply would decrease further as the magnitude and frequency of extreme weather events increases.
Melting ice, rising seas
According to scientists, the rise in sea level is accelerating, mainly due to the Greenland and Antarctic ice sheets melting faster.
Professor Hans-Otto Pörtner warned that in a business as usual scenario the sea level is estimated to rise about five metres by 2300. In addition, in warming oceans marine life has access to less oxygen and nutrients, putting food security at risk for communities dependent on seafood.
Pörtner added: “To minimise the severity of the impact of climate change, every bit of warming matters, each year matters, each choice matters, and most importantly, political and societal will matters.”
Trade and Development Bank, UNEP to collaborate on climate finance
In a pledge to continue stepping-up its commitment to climate change mitigation and adaptation action, the Eastern and Southern African Trade and Development Bank (TDB) signed a Memorandum of Understanding today with the UN Environment Programme (UNEP).
The MOU effectively establishes a framework of cooperation through which the two institutions can collaborate in a number of areas critical to the global environmental agenda.
In the field of clean energy finance, TDB and UNEP will work to enhance investment opportunities for both public and private finance to support the dissemination of clean energy technologies. This will include supporting the early stage development and project finance of renewable energy projects, as well as the development of financing mechanisms to allow access to smaller-scale sustainable energy and energy-efficient appliances for household and productive use.
Additionally, the two institutions will cooperate on supporting eligible TDB Member States to access Green Climate Fund resources to enable them to adapt to the changing climate and develop along a low-emission pathway.
“As a member of the International Development Finance Club, a leading global group of development financiers advancing the Sustainable Development Goals (SDGs) and climate finance, TDB works closely with its partners to implement the 2030 SDG Agenda as well as the Paris Climate Agreement. With global partners such as UNEP, we expect to more seriously realize the international commitment to support Africa to grow and develop sustainably,” said Admassu Tadesse, TDB President and Chief Executive.
Michael Awori, TDB Chief Operating Officer, added that “our commitment is evidenced by the fact that 70% of our power sector portfolio is in renewable energy. With this track record, we are the right partner with whom to co-finance and support more sustainable growth and development projects across various sectors.”
“While Eastern and Southern African economic growth continues to be strong, there is great potential to harness clean energy in the region. UNEP and TDB are partnering to support wide dissemination of clean energy technologies and unlock the financial resources needed to meet the challenges of the 2030 Agenda for Sustainable Development,” said Joyce Msuya, Deputy Executive Director of UNEP.
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