Global investor groups outline solutions to address climate change

Four global investor groups have published a guide outlining a range of strategies and solutions investors can use to address climate change. As countries aim to conclude the new global climate change agreement in Paris in December, actions taken by investors are central to tackling climate change and shifting the world to a low carbon economy.

The joint project of IIGCC in Europe, Ceres' Investor Network on Climate Risk (INCR) in North America, IGCC in Australia/New Zealand and ASrIA's Asia Investor Group on Climate Change (AIGCC) in Asia, Climate Change Investment Solutions focuses on four areas:

• Strategic review – actions to integrate climate change into investment beliefs and investment policies.
• Strategic asset allocation – actions for measuring and managing the risks and opportunities of climate change within existing asset allocation and through evolving asset allocation over time.
• Mitigation investment actions – actions for reducing the carbon intensity of existing assets, along with opportunities to invest in low carbon, clean energy and energy efficient assets.
• Adaptation investment actions – actions to reduce the vulnerability of existing assets to the physical impacts of climate change as well as building exposure to adaptation solutions.

In September last year, more than 350 investors – with a combined portfolio of $24 trillion assets – signed the Global Investor Statement on Climate Change calling on government leaders to provide stable, reliable and economically meaningful carbon pricing that helps redirect investment commensurate with the scale of the climate change challenge, as well as develop plans to phase out subsidies for fossil fuels. The new guide suggests practical steps investors can take to protect their portfolios from the risks of climate change and seize opportunities arising during the transition to a low carbon economy.