The UK Sustainable Investment and Finance Association (UKSIF) has urged the UK government to publish a green finance plan to help reduce emissions to net zero.
UKSIF said the strategy should “set out measures to improve the way the financial system manages climate-related financial risks, better protecting long-term investors such as pension funds”.
The organisation’s call came after the Committee on Climate Change published a ‘net-zero’ report, setting ambitious targets for a reduction in greenhouse gases by 2050.
UKSIF wants the government strategy to show how they will mobilise billions of pounds of investment in new clean energy, transport, heating and industry, and how they will make sure that people’s investments, savings and pensions are protected from climate-related financial risk.
“It is not possible to stop climate change without ending the UK’s contribution to greenhouse gases in the atmosphere. Setting a net zero target for the UK is clearly the right thing to do,” said Ben Nelmes, head of public policy at UKSIF. “But a net zero target is just the start of the next mountain to climb. Getting there will require radical and unprecedented changes in all parts of the economy.”
Meanwhile, the Global Impact Investing Network (GIIN) said it was encouraged by the growth in ESG investing but that so far action on climate change had been insufficient.
“As we watch another Earth Day come and go, the global community’s insufficient action on climate change is more disturbing than ever before,” said GIIN chief executive Amit Bouri.
Bouri said ESG alone would not be able to deliver the transformation required to halt climate change and fuel a greener economy.
UKSIF and the Climate Change Collaboration recently carried out a survey of fund managers with a combined $10 trillion of assets under management, finding that 86% were calling on oil companies to align their business with the Paris climate targets.
Despite this, the report also warned that “many fund managers are putting investors at risk” with only 21% having a policy that aligns all their funds with the Paris agreement.
Fund managers were also criticised for failing to develop effective strategies to engage oil companies.
UKSIF has been vocal in the need for a greater role that investment consultants play in aiding pension funds to incorporate ESG into their investment strategies.
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