Press Conference on Climate Risk and Energy Solutions Investor Summit

 

With climate change promising to be one of the biggest factors in global investment for the foreseeable future, investors were changing the way in which they did business and catalysing new energy solutions along the way, experts said at Headquarters today.

At a press conference sponsored and co-hosted by the United Nations Office for Partnerships was a panel of business leaders attending the Investor Summit on Climate Risk and Energy Solutions, which brought 450 global investors — controlling tens of trillions of dollars — to the United Nations for discussions on finance and climate change mitigation.  The event’s other co-hosts were the Ceres non-profit investor network and the United Nations Foundation.

“We’ve never been closer to taking the kind of action steps that are needed to deal with climate change and the risks it poses,” said Kevin Parker, Global Head of Deutsche Asset Management.  Policy frameworks in place around the world were beginning to bring about “real change” in how the economy operated, he said, adding that investors were now coming to the fore, several years after the enactment of those sustainability policies.  Indeed, the investment community’s recognition of climate risk had “taken hold like never before”, he stressed.

Accompanying Mr. Parker were Ethan Zindler, Head of Policy Analysis at Bloomberg New Energy Finance; Mindy Lubber, Ceres President and Director of the Investor Network on Climate Risk; Mark Vachon, Vice-President of General Electric’s Ecomagination; Jack Ehnes, Chief Executive Officer of the California State Teachers Retirement System; and Donald MacDonald, Chair of the Institutional Investors Group on Climate Change, and Trustee Chair of the BT Pensions Scheme in the United Kingdom.

Mr. Zindler said that, even in a troubled economy, overall investment in clean energy had grown 5 per cent in 2011 to $260 billion, adding that the industry had more than quintupled since 2005.  Solar power technology led the way, representing some $137.5 billion in investments and having surged 36 per cent in 2011 alone.

Despite those positive changes, the panellists stressed that more must be done to elevate the attention of both investors and policymakers on the urgent issue of climate change.  “We need to try to solidify the good intentions and the work that we are doing,” said Mr. MacDonald.  That meant improving business practices and ensuring that other companies were doing the same.

The panellists urged companies to continue to innovate, and investors to continue to recognize the critical importance of climate change mitigation.  Ms. Lubber said that the 450 global investors attending the summit at the United Nations were leading the way in those areas.  “They are here to demonstrate a powerful narrative” that management and investment strategies were changing, she added.  “They are here to say:  ‘As investors, we can catalyse a low-carbon economy.’”  And with the changing narrative, the leaders of the movement were also changing, she said, pointing out that global solutions to climate change were now coming from the private sector as much as any other.

Mr. Vachon noted the prevailing “false choice” between strong economics and strong environmental investment, emphasizing that investing in sustainability was no longer a fringe element in the corporate landscape.  On the contrary, “organizations that aren’t on board run a high risk of becoming irrelevant”, he said.  To ignore the risks, and visible impacts, of climate change was to ignore a “very obvious market signal”, he stressed, adding that companies that failed to take sustainability into account would also fail to recruit the strongest young business talent.  For its part, the rapidly growing Ecomagination was investing significantly in sustainability research and development, he said.  “The answer is to lead,” he added.

“There is no doubt that we, as a society, must come together to ratchet down the risk of climate change,” said Mr. Ehnes, head of the second largest pension fund in the United States, managing $146 billion in assets.  Investors were signing on to a new action plan that called for greater private investment in low-carbon technologies and tougher scrutiny of climate risks across their portfolios.  They had also announced new guidelines on how to boost that attention, as well as benchmarks for self-evaluation on those standards.

The panellists answered several questions from correspondents in New York and from others from across the United States via teleconference.  Asked about the impact of the 2011 Fukushima Daiichi nuclear disaster on the renewable energy industry, Mr. Zindler said clean energy stocks had in fact risen in the short term, but that rise had not been felt globally.

Mr. Parker added that more Japanese renewable energy producers were likely to enter the market in the aftermath of the accident.  Mr. Ehnes said that, from an investor’s point of view, such situations were a “wake-up call” to ensure that their portfolios were taking all necessary climate change-related risks into account.

Noting that many climate change experts had stressed the need for significant changes by 2017, another correspondent asked what was being done to consolidate a “truly concerted effort” to combat climate change by that date.

Ms. Lubber replied that 30 out of 40 countries polled in a Deutsche Asset Management study released at the United Nations summit, had implemented strong environmental policies.  Nonetheless, some nations were lagging, and the United States, in particular, had “some catching up to do”.  Hopefully a binding international treaty on climate change mitigation would be adopted, ending what had long been a “piecemeal approach”.

Other panellists agreed with Ms. Lubber that the problem was of a global nature and required global solutions.  They also pointed out, however, that local innovations and policies could be very effective, and called for parallel solutions on both the global and local levels.  Acknowledging the urgency of the problem, Mr. MacDonald said solutions to climate change were likely to begin slowly and pick up speed as they progressed.  “We are in a marathon, not a sprint,” he emphasized.

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For information media • not an official record