Institutional investors have called on major banks to turn up the heat on climate issues and set enhanced net zero targets for 2050 or sooner.
Through the Institutional Investors Group on Climate Change (IIGCC), investors urged banks on Monday to align financing with net zero emissions, scale up green finance, and withdraw from projects that don’t align with Paris goals for a transition away from a carbon-dependent economy.
The 35 investors involved, representing a combined $11 trillion (€9.1 trillion) in assets under management, highlighted that in the years since the Paris Agreement, the world’s biggest 60 banks have provided $3.8 trillion of financing for fossil fuels – with 2020 levels higher than 2016, representing a large disparity between climate rhetoric and reality.
According to estimations by the Inter-Governmental Panel on Climate Change, up to $3.8 trillion a year in investment is needed to achieve the low-carbon transition for supply-side energy system investments alone, the group of investors also said.
Investors involved in the call to action include Legal & General Investment Management, The Church of England pension funds, Brunel Pension Partnership, and Federated Hermes.
Stephanie Pfeifer, chief executive of IIGCC, said: “Banks have a vital role to play in the realisation of a net zero and resilient future. There is an urgent need for banks to take and accelerate action to support the goals of the Paris Agreement. With fossil fuel financing increasing since 2016, the time to act is now.”
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