|Montreal, 25 September 2014 – Some of the world’s largest institutional investors together with Fiona Reynolds, Managing Director of the UN-supported Principles for Responsible Investment (PRI), today launched the Montreal Carbon Pledge at the PRI annual conference—PRI in Person—in Montreal.
By signing onto the Montreal Carbon Pledge, investors commit to measure and publicly disclose the carbon footprint of their investment portfolios on an annual basis. Overseen by the PRI, the Montreal Carbon Pledge aims to attract US $3 trillion of portfolio commitment in time for the United Nations Climate Change Conference in December 2015. It also allows investors to formalize their commitment to the goals of a recently introduced Portfolio Decarbonization Coalition, co-founded by the United Nations Environment Programme Finance Initiative (UNEP-FI).
“We are proud to launch the Montreal Carbon Pledge, a commitment by investors to translate climate talk into walk,” said Fiona Reynolds, Managing Director of the Principles for Responsible Investment. “The first step to managing the long-term investment risks associated with climate change and carbon regulation is to measure them, and this initiative sets a clear path forward.”
Carbon footprinting enables investors to quantify the carbon content of a portfolio. A growing number of investors, including Etablissement du Régime Additionnel de la Fonction Publique (ERAFP), AP4, London Pensions Fund Authority (LPFA) and VicSuper, have already taken steps to measure the carbon footprint of their investments. Seventy-eight per cent of the largest 500 publicly listed companies now report their carbon emissions.
“There is a perfect storm of reported carbon data, reliable portfolio carbon measurement tools and low carbon investment solutions, said Toby Heaps, CEO of Corporate Knights. “This makes it possible for investors to understand and act to reduce their carbon exposure like never before.”
“It is hard to dispute that carbon is a risk, so how can we fulfil our duty of trust if we don’t implement the systems necessary to assess this risk in order to reduce it and, worse still, having measured the risk, we don’t disclose it to stakeholders” said Philippe Desfossés, CEO of ERAFP.
"The main reason to carbon footprint and decarbonize portfolios is not an ethical or moral one for asset owners - it is a financial risk imperative,” said Julian Poulter, Executive Director of the Asset Owners Disclosure Project (AODP).
With over US$75 trillion in investable assets, institutional investors play a critical role in financing the transition to a climate resilient economy.
The PRI will manage the online portal where investors can endorse the Montreal Carbon Pledge. Available at montrealpledge.org, the portal will let investors report the size of their portfolio carbon footprint commitment, and any associated carbon reduction targets.
The first five investors who commit to the Montreal Carbon Pledge receive complimentary access to the Portfolio Carbon Screener, generously provided by yourSRI.com and South Pole Carbon.
Early endorsers include:
About the Principles for Responsible Investment (PRI)
The Principles for Responsible Investment Initiative (PRI) is a network of international investors working together to put the six Principles for Responsible Investment into practice. The Principles were devised by the investment community. They reflect the view that environmental, social and governance (ESG) issues can affect the performance of investment portfolios and therefore must be given appropriate consideration by investors if they are to fulfil their fiduciary (or equivalent) duty. The Principles provide a voluntary framework by which all investors can incorporate ESG issues into their decision-making and ownership practices and so better align their objectives with those of society at large. The PRI counts many of the world’s largest investment institutions among its 1,260 signatories, who collectively manage assets of more than US$ 45 trillion.
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