Investors worth $15 trillion have called on world leaders to stand by their commitment to fight climate change, as the U.S. weighs pulling out of a global treaty to reduce carbon emissions.
In a letter released Monday, 217 investment organizations including the $320 billion California Public Employees Retirement System and $1.2 trillion manager Legal & General urged the governments of nineteen countries and the European Union the G20 to adhere to the Paris Agreement, a 2016 covenant to keep global temperatures below two degrees Celsius.
As long-term institutional investors, we believe that the mitigation of climate change is essential for the safeguarding of our investments, the investors wrote.
Although the Paris Agreement was signed by nearly all G20 members, some including Russia and Turkey have not yet ratified the climate change accord. The United States, which committed to the agreement under President Barack Obama, may abandon the pact under President Trump, who has already reversed a number of Obama-era environmental regulations.
Investors back the Paris Agreement on climate change because it provides the economic framework for us to manage both the risk and opportunities over the long term, said Anne Simpson, investment director of sustainability at CalPERS, noting that corporations including ExxonMobil also support the accord. When investors and energy companies join forces, politicians should pay attention.
In the letter, investors aired concerns about the lack of climate change discussion at a G20 finance summit in March, and called for explicit acknowledgement of the topic at the G20 Leaders Summit in July.
It is vital that the governments of G7 and G20 nations continue to publicly express their commitment to support climate finance to both mitigate and adapt to the effects of climate change, they wrote.
Other signatories included the $203 billion California State Teachers Retirement System, HSBCGlobal Asset Management, and the New York State Comptroller, who is responsible for a $179 billion pension system.
Strong and clear government policy is needed to maintain forward momentum and prevent catastrophic changes to our climate, said New York Comptroller Thomas DiNapoli. Its vital that governments live up to their commitments under Paris Climate Agreement. The suggestion that the U.S. would withdraw from the Paris Agreement is disturbing and ignores the fact that investors and nations around the globe are actively addressing climate risk.
Several sustainable investing organizations coordinated the letter, including the Asia Investor Group on Climate Change, the Carbon Disclosure Project, Ceres, the Investor Group on Climate Change, the Institutional Investor Group on Climate Change, and the Principles for Responsible Investment (PRI).
With the U.S. threatening to pull out of the Paris Climate Agreement next week, now is the time for investors to make their voices heard by encouraging governments to stand firm on their commitments to the Paris Agreement, said Fiona Reynolds, PRI managing director, in a statement.
The Trump administration is expected to announce a final decision on whether to withdraw before the G7 meeting in Italy this month.