Hong Kong -- Investors from over 20 emerging and developed economies gathered for the first time last week to consider the risks and opportunities arising from climate change, and to develop further their collective efforts. The meeting - organised by the Asia Investor Group on Climate Change, with support from partners in the Global Investor Coalition on Climate Change - involved members of the four international climate change investor groups, representing over US$20 trillion assets under management.
Speaking on the final day, Assaad Razzouk, CEO of Sindicatum Sustainable Resources, based in Singapore, said: ‘Asia Pacific is set to roast the world. Analysis by the World Resources Institute shows that across the region there are 925 coal fired power stations commissioned or on the drawing board with average 50 year coal supply contracts. In one sweep, this is the formula for a 6 degree world. Investors in the region need to consider the implications of these projects and whether they will become stranded assets’.
Despite this, there was agreement that China’s national energy intensity targets may open up these investment opportunities on the mainland and could be a catalyst for similar targets elsewhere in the region.
Video keynote speakers, Ban Ki-moon, United Nations Secretary General; Al Gore, previous US Vice-President; Rachel Kyte, Senior World Bank VP and Christiana Figueres, Executive Secretary, the UN Framework Convention on Climate Change all stressed the essential role of the financial services industry in combating climate change and keeping average global temperatures at or near the internationally agreed 2 degree limit.
Announcing the establishment of the Low Carbon Investment Registry
At the Forum, the Global Investor Coalition announced a major new initiative - the development of a Low Carbon Investment Registry – the first global listing of low carbon investment case studies. The Registry allows investors to voluntarily record and showcase their low carbon investment activities and gives the public and policy-makers the chance to understand what investors are doing. The Registry demonstrates the international collaboration on climate issues, between investors in developed and emerging markets and between public and private sector funds. Whilst there is great interest in when, why and how much investors allocate to low carbon assets, there is little visibility of what is happening and the Registry represents an important step forward in the sharing of this information.
(Further detail on the Low Carbon Investment Registry can be found in FAQs below)
Other take-outs from the Forum included:
Investment in Energy Efficiency a win-win
Michael Friedlander of Millennium Capital pointed to the substantial climate-investment win-win in energy efficiency, pointing out that this is the quickest way to delay the need for new build of coal plant or other types of energy supply. Dame Jennifer Shipley, former Prime Minister of New Zealand, concurred with this analysis citing the ‘Tomorrow Street’ campaign to show what can be achieved by companies that have sound supply and demand side strategies.
Shaun Kingsbury, CEO of the UK Green Investment Bank, explained some of the innovative funding solutions being undertaken by the Bank to take advantage of non-domestic energy efficiency opportunities - for example, collaboration with Aviva Investors to improve the performance of the National Health Service building stock.
Renewable Energy Advantage in Emerging Economies
Tom Murley of HgCapital, which released a report at the conference on the activities of European investors in clean energy, pointed to the advantage which emerging economies have in developing clean energy. ‘It’s easier and cheaper to install smart grids from the get-go, and take full advantage of the rapidly falling costs of renewable energy installations especially in the solar electric field’ he said.
Global Investor Coalition on Climate Change
The First Global Investor Forum, held in Hong Kong on 13th and 14th June was organised by the Asia Investor Group on Climate Change, with support from partners in the Global Investor Coalition on Climate Change. The coalition provides a global platform for dialogue between investors and governments on policy and investment practice related to climate change. It consists of the following: four regional climate change investor groups:
Institutional Investors Group on Climate Change (IIGCC) is a forum for collaboration on climate change for European investors. It provides investors with a collaborative platform to encourage public policies, investment practices, and corporate behavior that address long-term risks and opportunities associated with climate change. IIGCC currently has over 80 members, including some of the largest pension funds and asset managers in Europe, representing around €7.5trillion.
Investor Network on Climate Risk (INCR) supports more than 100 institutional investors with assets exceeding $11 trillion in addressing the financial risks and investment opportunities associated with climate change. INCR works with its members on climate-related investment practices, corporate engagement, corporate disclosure and policy issues. INCR is coordinated by Ceres, a US-based coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges including climate change and water scarcity.
Investor Group on Climate Change (IGCC) is a collaboration of Australian and New Zealand investors focusing on the impact that climate change has on the financial value of investments. The IGCC recognize that the financial return of an investment is impacted by climate change. As such, the IGCC aims to encourage government policies and investment practices that address the risks and opportunities of climate change, for the ultimate benefit of superannuants and unit holders.
Asia Investor Group on Climate Change (AIGCC) is a forum set up by the Association for Sustainable and Responsible Investment in Asia (ASrIA) to assist Asia’s investors to consider the risks and opportunities associated with climate change and low carbon investing. AIGCC provides capacity for investors to share best practice and to collaborate on investment activity, credit analysis, risk management, engagement and policy. AIGCC is an initiative of ASrIA, the Association for Sustainable & Responsible Investment in Asia.