Investors managing $11tr of assets urge banks to curtail fossil fuel financing
Time passes at Canary Wharf, at the heart of London s financial hub
Institutional Investors Group on Climate Change calls on banks to back their net zero pledges with moves to halt support for fossil fuels and activities that drive deforestation
A coalition of major investors managing a combined $11tr of assets worldwide is calling on the banks to boost their 2050 climate goals by curtailing financing of activities that contribute deforestation, land-use change and fossil fuel expansion.
Aviva Investors, Legal & General Investment Management, Sarasin & Partners, and the Church Commissioners for England are among nearly three dozen investors which have today joined together in urging major banks to set enhanced net zero targets that include interim emission reduction goals, commitments to scale up green finance, and pledges to withdraw financing from recipients showing no evidence of transitioning tow
The same principle of science-based targets is also now getting applied to the operation of buildings through the Carbon Risk Real Estate Monitor (CRREM). This is highlighted by the IIGCC’s Net Zero Investment Framework as the main tool for assessing real estate and is already sending shivers down the spines of investors with its graphs forecasting stranded assets over the next 30 years.
The idea behind CRREM is that you can plot your building’s performance against a science-based trajectory for that type of asset. And when it exceeds its “carbon budget” it becomes stranded because it is no longer in line with the Paris agreement. If this happens, the asset will potentially attract a “brown discount” from investors and start losing value.
Investors have shunned carbon-intensive and sin sectors this month. The message is clear: if they want to raise capital, companies in dirty industries need to show they are making meaningful moves towards becoming more socially and environmentally responsible.
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So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap, ‘pension freedoms or consultations around ‘value for money , says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).Download
In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.Download
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