Just days before the Paris Agreement signing in New York, investors urge world leaders to let the climate deal enter into force sooner than planned, possibly as early as late 2016.
In a letter to the leaders of some of the world’s largest economies that was released yesterday (19 April), a number of high-profile investor groups remind the leaders that they were given an “unequivocal signal” to shift assets swiftly towards the low-carbon economy.
Investors now want to see leaders follow through on their statements in Paris, and quickly take concrete action. The Paris Agreement was originally intended to take effect in 2020.
The groups, which represent more than 400 institutional investors who collectively manage more than $24 trillion in assets, urge world leaders to “sign the Paris Agreement on April 22nd at the United Nations in New York” and then usher it through their national legislatures “as soon as possible.”
Almost 200 countries have already ‘adopted’ the Paris Agreement, but legally that was just their first move. In a next step, almost all of them will join the symbolic signing ceremony in New York on 22 April. But in a third and final step, governments will need to get national politicians on board to officially ratify the agreement.
— Christiana Figueres (@CFigueres) April 19, 2016
Ahead of schedule
In their letter, investors offer world leaders their support to “complete domestic preparations for accession, and to accede to the Paris Agreement as soon as possible.”
Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, which represents over 120 European asset managers – or nearly €13 trillion – said: “It’s now vital the 195 countries who adopted the Paris Agreement, especially the top 20 major emitters, [sign and accede] to the Paris Agreement to bring it rapidly into force.”
Countries like the United States, China and Canada have also urged for the deal to be ratified ahead of schedule. It is not clear if the European Union, which played an instrumental role in forging the deal, will be able to be among the first to ratify the deal as it will have 28 national ratification processes to take into account.
$24trn global investor groups urge world leaders to sign Paris climate deal.It is about the economy & my kids future https://t.co/Eyfj8OH4at
— Mindy Lubber (@MindyLubber) April 19, 2016
Investors in North America also believe it is crucial that world leaders keep the political momentum that produced the Paris Agreement going,” says Mindy Lubber, President of Ceres and Director of the Investor Network on Climate Risk (INCR).
“The Paris Agreement provides the framework to trigger the pace and scale of investment – at least an additional $1 trillion per year, four-fold higher than current levels – needed to decarbonise the global economy while limiting global warming to two degrees Celsius or less,” Lubber said.
Paul Simpson, CEO at CDP commented: “This rallying cry shows an unequivocal business and financial imperative for governments to take concrete action.”
Increased regulatory certainty
Last year, ahead of the G7 summit in Germany, the CEOs of more than 120 institutional investors already expressed their support for the adoption of a long-term decarbonisation goal by the G7 summit – and ultimately by the Paris climate conference.
“Countries that accede early to the Paris Agreement will benefit from increased regulatory certainty, which will in turn help attract the trillions of investments necessary to secure the low-carbon transition,” said Eric Usher, director at the UNEP Finance Initiative, a global partnership between the UN and the financial sector.
The letter is signed by executives of the Institutional Investors Group on Climate Change (IIGCC) , the Investor Group on Climate Change (IGCC), the Investor Network on Climate Risk, CDP, Principles for Responsible Investment and the UNEP Finance Initiative.
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