Mining News Pro - A group of 457 investors, which oversees more than $41 trillion in assets combined, and a coalition of group of 79 company CEOs are calling on the G7 — Canada, France, Germany, Italy, Japan, the UK and US — to work harder on reducing greenhouse emissions and cut funding for fossil fuels.
In separate letters to governments as leaders of the G7 meet in England, and ahead of a global climate summit in November, the two groups agreed on the need for “bold and courageous” immediate action to limit global warming to 1.5°C, as set out by the Paris Agreement in December 2015.
Fidelity International, Schroders, DWS Group, Legal and General Investment Management and Pacific Investment Management Co, were among the hundreds of influential investors to sign the petition to all governments as leaders of the G7 meet in England.
They represent the largest collective assets under management to sign on to a global investor statement to governments on climate change since the first petition in 2009.
In their letter, they said that those countries to take the lead in making climate-related financial reporting would become “increasingly attractive” investment destinations. Laggards would find themselves at a competitive disadvantage, the group representing an estimated 37% of all global assets under management wrote.
“Full implementation of the Paris Agreement will create significant investment opportunities in clean technologies, green infrastructure and other assets, products and services needed in this new economy,” the investor coalition said.
Data compiled by a team of economists show that, between 2017 and 2019, the G7 still provided $86 billion in public finance for fossil fuels, of which 88% went to oil and gas. This is more than three times their support for clean energy over the same period.
Canada, Japan, and the US were the largest, providing $32 billion, $30 billion, and $9 billion, respectively, in public finance for fossil fuels.
Changing the rules
The Alliance of CEO Climate Leaders, representing top bosses of large companies such as Newmont, Novo Nordisk, Royal DSM, ABB, AstraZeneca and Deloitte, also told governments to speed up plans to cut emissions.
They said that to force corporate action, country leaders needed to change the rules of the game. That includes, they said in an open letter, developing a market-based carbon pricing mechanism and setting “credible” decarbonization targets.
The bosses also backed an elimination of fossil fuel subsidies, cuts on tariffs for climate-friendly goods, and a boost in research and development funding for green technologies.
“It is an important and significant move for this many CEOs to put their names forward for deeper collective collaboration,” the World Economic Forum’s managing director Dominic Waughray said.
“For market commitments to translate into the required change in the real economy, we need a policy environment that closes the gaps between climate ambition and policy action,” Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change added.
The chief executives’ call echoes concerns voiced in a recent report by the International Energy Agency (IEA), highlighting the need for an urgent ban on new fossil fuel projects.
The Environment Ministers of the G7 countries have already committed to end funding for new overseas coal projects by the end of this year. But 51% of their covid-19 economic recovery funds – a total of $189 billion – paid between January 2020 and March 2021 were earmarked as financial aid for the fossil fuel industry, a study backed by Cardiff University shows.
“Worse, $8 of every $10 dedicated to non-renewable energy was paid with no conditions on these companies to reduce their emissions,” wrote Cardiff lecturers George Ferns and Marcus Gomes.
At the same time, oil, gas and coal companies continue to seek new funding sources while lobbying to undermine regulation, they noted.