New Investor Agenda report identifies eight features for global climate policy required to catalyse greater climate action

6 September 2023
A new report by The Investor Agenda takes the opportunity provided by the UNFCCC Global Stocktake to summarize how global climate policy has developed and to describe the core features that should underpin climate policy going forward.

6 September 2023: A new report takes the opportunity provided by the UNFCCC Global Stocktake to summarize how global climate policy has developed and to describe the core features that should underpin climate policy going forward. Several case studies have been provided to illustrate effective climate finance policy in Australia, the European Union, Japan and the United States.

The report was written on behalf of the seven Founding Partners of The Investor Agenda – AIGCC, CDP, Ceres, IGCC, IIGCC, PRI and UNEP FI. Together, these investor groups collaborate to bring together and elevate the best investor guidance on tackling the climate crisis and advocate collectively for public policy to accelerate the net-zero transition.

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Eight key features of good climate policy

When governments and policymakers set appropriate policies, it creates an environment where investors can deploy significant capital to help mitigate global warming and protect communities and economies from climate damage and disruption.

In turn, this helps governments meet their climate goals and obligations, while protecting the interests of beneficiaries. The report identifies eight key features of good climate policy that are necessary to limit global warming to 1.5°C and achieve the goals of the Paris Agreement. They include:

  1. Clear Commitments to Action
  2. Clear Short-, Medium- and Long-term Targets
  3. Comprehensive and At Scale
  4. Sector-specific Policies
  5. Provide the Right Incentives
  6. Just Transition
  7. Transparency

Quotes from the Founding Partners of The Investor Agenda:

Rebecca Mikula-Wright, CEO, AIGCC and IGCC:

“It is encouraging to see momentum building towards a resilient, net zero emissions global economy.

“Policy makers are taking great strides towards a just transition including work on sector-by-sector climate pathways, climate-related financial disclosures, and national assessments of physical risk and resilience.

“However, more urgent action is needed to catalyse the finance required to fund decarbonisation and address systemic climate risk.

“Through IGCC and AIGCC, investor voices are being channelled effectively to policymakers. We look forward to continuing our work with investors, government, policymakers and stakeholders to step up our efforts to secure a safe climate and stable financial system.”

Pratima Divgi, Head of Capital Markets, North America, CDP:

“This report serves as a valuable guide for policymakers in framing policies that support investors in setting transition plans toward achieving net zero. As the world’s largest aggregator of climate and environmental data, CDP supports policymakers in shaping effective frameworks and policies to help the financial sector integrate and scale climate action. Taking a holistic approach to environmental disclosure, CDP’s platform now covers climate, water, forests, biodiversity, and plastics data, that can be incorporated into financial decisions accelerating sustainability and building resilience across the global financial system.”

Mindy Lubber, CEO and President, Ceres:

“Business action on climate change must be met with bold policy and regulatory action if we are going to achieve our global goal of limiting temperature rise to no more than 1.5°C. In the U.S, we have one of the biggest opportunities to help make progress towards this goal and accelerate the just transition to a stronger, more resilient economy. The Inflation Reduction Act sets a new standard for domestic policy climate action and other countries should follow suit with similar investments and incentives. Investors have a duty to their beneficiaries over the long-term, and therefore, have long called on governments to address climate risk as financial risk and take the appropriate government action necessary to catalyze the critical finance needed in the economic transition.”

Stephanie Pfeifer, CEO, IIGCC:

“As we approach COP28 and the Global Stocktake, this timely report sets out clearly to policymakers what the priority principles and frameworks need to be if private finance is to play a key role in closing the gap to 1.5°C. While investors have an integral role to play in facilitating the transition of the global economy, this is largely predicated on policymakers creating a conducive environment and implementing the appropriate policies necessary to catalyse changes in capital allocation and investment at scale. With more than 400 members with over €65 trillion, IIGCC will continue to work closely with governments in their policy deliberations to represent the investor voice and to support a sustainable and prosperous future for all.”

David Atkin, CEO, PRI:

“Investors have a vital role to play at the very center of the climate transition, but we must be clear that private finance cannot address all these challenges in isolation. Robust and ambitious policy action is needed to support the actions already being undertaken by investors. Part of the PRI’s key mission is to build the bridge between investors and policymakers, to help ensure that policy decisions facilitate and support investor action on climate issues, as is consistent with investors’ fiduciary duty. We’re pleased to support this report, along with our partners through the Investor Agenda, and look forward to continuing to work with investors and policymakers alike to drive further ambition in this hugely important area.”

Eric Usher, Head, UNEP FI:

“The climate emergency and its impacts on the economy, society and ecosystems can no longer be considered a distant problem. July 2023 was the world’s hottest month on record. The United Nations Secretary-General, Antonio Guterres, marked this milestone as the arrival of “the era of global boiling”. Despite a shift in public policy on the economic transition – most notably through the Inflation Reduction Act and the EU’s Fit for 55 policy – greater action is required from policymakers to deliver a low-carbon future. Public policy is essential to creating the conditions for investors to shift capital towards low carbon solutions and UNEP FI fully supports the recommendations highlighted in this report.”