As recent scientific reports and extreme weather events worldwide make clear, climate change and resource scarcity pose increasing threats to the global economy. The need to provide sustainable energy to a growing global population without causing catastrophic climate impacts is an urgent challenge. But financing the necessary transition to a clean energy economy is estimated at $500 billion to $1 trillion per year – up to $3 trillion by 2030.
Institutional investors and other leaders of the financial community have a unique role to play in the transition to a low-carbon economy. They can:
- Leverage their strength as economic leaders to drive policymakers further on climate and energy policy
- Argue that such policies will lead to short term job creation and long term economic stability
- Commit to integrating environmental, social and governance factors into their investment decision-making and processes and commit capital to climate solutions like clean energy
- Move the market towards greater transparency, so that business impacts of climate change can begin to be properly priced
There is unprecedented interest from institutional investors in pursuing new opportunities in low-carbon, clean energy solutions. Scaling such investments will not only help mitigate climate change impacts and provide clean, affordable, reliable energy to billions of people worldwide, but will also provide long-term value in a carbon-constrained economy. Investors are also under growing pressure to hedge portfolios against systemic risks from climate policy uncertainty, resource constraints and the physical impacts of a changing climate.
About the Investor Summits
Since 2003, the biennial Investor Summit on Climate Risk at the United Nations has been the preeminent forum for leading institutional investors in North America, Europe and the rest of the world to discuss the implications of climate change for capital markets and their portfolios.
At the 3rd Investor Summit on Climate Risk held on February 14, 2008, investors representing more than $22 trillion joined Ceres and the United Nations Foundation to discuss the risks and opportunities posed by climate change.
At the last Summit on January 12, 2010, more than 520 financial, corporate, and investor leaders with more than $22 trillion in combined assets highlighted the fact that private investment in climate change solutions is crucial for addressing the climate crisis and will not happen at the necessary scale without climate and energy policies that limit emissions and put a price on carbon. The 2012 Summit will continue to drive forward this urgent agenda.