Get your cash out of fossil fuel backed funds says UN climate chief
- 15 January 2014
- From the section Science & Environment
The pensions and nest eggs of billions of people around the world are being put at risk by global warming, says the UN's climate chief.
Christiana Figueres has called on investors to pull their money out of fossil fuel linked funds.
She said institutional investors would be in blatant breach of their fiduciary duty if they ignored the "clear scientific evidence".
Ms Figueres said that they should put their money into green assets instead.
The issue of investing in oil, gas and other fossil fuel-backed funds has provoked a heated debate over the past 12 months.
Environmental campaigners have argued that if the Earth is to avoid dangerous climate change, defined as temperature increases above 2C, then up to three quarters of the coal, oil and gas that remains must be left in the ground.
Some financial experts have argued that if these resources are essentially declared worthless, this will have a major impact on the share values of the fossil fuel corporations that own them.
Now the Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), has joined the voices calling on investors to get out of high carbon assets.
"The continued and dangerous rise in greenhouse gases in the atmosphere is in large part the direct result of past investments in energy and mobility systems based on the use of fossil fuels," Ms Figueres told an audience of investors and corporate leaders in New York with more than $20 trillion in combined assets.
"New investments must now assist in reversing this unsustainable trend, and quickly if the world is to have a chance of staying under a 2C temperature rise," she said.
Ms Figueres argued that investment decisions needed to reflect the science. Climate change, if left unchecked, could devastate the lives, livelihoods and savings of billions of people into the future.
Last November in Warsaw, Ms Figueres lambasted the coal industry and challenged them to divest from carbon.
She is now concerned that too few companies have disclosed the full picture of their holdings in fossil fuel resources. Ms Figueres says that huge opportunities exist for investors in climate friendly assets.
According to the International Energy Agency, the world will need to invest $36 trillion in clean energy by 2050 to keep the Earth on track to stay below a 2 degree rise.
However the move into green investments is uneven. Last year around $10bn of green bonds were issued, with many of the leading global banking groups such as HSBC, Zurich Insurance and JP Morgan involved.
But while around $281bn was invested in 2012, this is much lower than the estimated trillion dollars a year that experts say are required.
Negotiations on a new global treaty on climate change stuttered last year, but the intervention of UN secretary general Ban Ki-Moon might give the process some momentum later this year.
The UNFCCC hopes to successfully conclude a comprehensive global deal by the end of 2015.
This is expected to have implications for investors the world over.
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