Calpers, Amundi and Schroders have teamed up with 200 other large investors to urge governments globally to stand by their commitment to fight climate change, as fears rise that Donald Trump, the US president, will pull out of the Paris agreement.
The coalition of large investors that collectively oversee $15tn in assets have sent a letter to the G7 group of influential countries calling on their governments to uphold their promises to tackle climate change.
The letter was sent in response to Mr Trump’s claim last month that he will soon decide on the future of the US’s commitment to the landmark 2015 Paris accord, where more than 190 countries agreed to limit temperature rises.
Pelle Pedersen, head of responsible investment at PKA, the Danish pension fund that oversees €35bn for 300,000 Danish workers and one of the signatories of the letter, said: “Mr Trump’s potential decision to leave the Paris agreement would be poison for global climate efforts and leave investors in a limbo of uncertainty.”
Mr Trump has long been an opponent of the Paris agreement, which his predecessor, Barack Obama, signed up to. The US president said last month that the accord was “unfair” on the US and would cost the country “massive amounts of money”.
In the letter seen by FTfm, the coalition of investors, including Legal & General Investment Management, Aviva Investors and Henderson Global Investors, the UK fund houses, said that “mitigation of climate change is essential for the safeguarding of our investments”.
Pension funds and asset managers are concerned they could lose money if different governments have inconsistent policies on climate change. In the letter, the investors said that “effective climate policy mechanisms” were vital for investors to make informed investment decisions.
Steve Waygood, chief responsible investment officer at Aviva Investors, which manages £319bn in assets, said: “We need global statesmen and -women to continue to look forward to a carbon neutral economy, not back to a fossil fuel past.
“Any backsliding by President Trump will be a financial and economic loss for us all, not just the US economy. Unravelling [the] Paris [agreement] would also be a disaster for future generations.”
Fiona Reynolds, head of the Principles for Responsible Investments, the UN-backed group, added: “With the US 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 commitment to the [accord].”
The investors sent the three-page letter to the G7 ahead of their upcoming summit in Italy at the end of May. The letter will also be sent to the G20 group during the summer.
Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change in Europe, a forum for asset managers and pension funds that helped bring the signatories together, said: “Regardless of what the US administration does, it is vital that every Paris agreement signatory across the G7 and G20 adopts policies that drive better disclosure of climate risk, curb fossil fuel subsidies and [help] to catalyse significant private sector investment in low-carbon solutions.”
During his election campaign, Mr Trump vowed to “cancel” the climate pact. The president has yet to act on his promise, but he has already signed an executive order to boost the domestic coal industry and roll back climate policies set by Mr Obama.
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