Isra-Mart srl:Global investors latest to demand Cancun deal

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A group including many of the world's largest institutional investors has today issued a fresh call for governments and policymakers to take urgent action to tackle man-made climate change or risk "economic disruptions far more severe than the recent financial crisis".

The statement, which was organised by sustainable investment group Ceres and the UN Environment Programme Finance Initiative, was signed by 259 investors that combined manage assets worth over $15 trillion – equivalent to more than one-quarter of global market capitalisation.

Signatories include global investment giants such as Allianz and HSBC, as well as a host of pension funds from Europe and North America and investment groups from a large number of developing economies.

Its release comes on the same day that around 250 firms from around the world also signed the Cancun Communiqué, calling on world leaders to deliver significant progress at the upcoming UN climate summit.

The investor statement acknowledges that there is unlikely to be a binding agreement in Cancun, but it argued that investors want to see progress towards a deal that can be agreed next year in South Africa.

It also calls on countries to urgently adopt ambitious domestic policies that can help to drive investment in low carbon infrastructure, including mechanisms to put a price on greenhouse emissions, phase out fossil fuel subsidies, incentivise spending on clean technologies, and encourage corporate disclosure of climate risks.

"We cannot drag our feet on the issue of global climate change," said Barbara Krumsiek, Chair of the UN Environment Programme Finance Initiative and chief executive of US-based investment firm Calvert Investments. "Based on the Stern Report, we know these impacts could reach global GDP cuts of an unimaginable 20 per cent per year. Why should we take that risk? The solutions are quickly emerging and we must deploy these solutions to help secure the innovation and sustainable growth our economies need."

The group also expressed frustration at US failure to deliver ambitious climate change legislation, arguing that the deadlock on Capitol Hill was leading to increased risks for investors.

"Climate change may be out of vogue in Washington today, but it poses serious financial risks that are not going away and will only increase the longer we delay enacting sensible policies to transition to a low-carbon economy," said Jack Ehnes, chief executive of the California State Teachers' Retirement System (CalSTRS), the second largest public pension fund in the US. "The nation's leaders should take the cue from California, where strong clean-energy policies have spurred American innovation and created thousands of jobs."