The heads of three investor coalitions representing money managers that have committed to reduce carbon emissions from their portfolios are calling on Britain’s new prime minister to uphold the country’s existing commitment to eliminate net greenhouse gas emissions.
In a letter to Liz Truss made public Wednesday, leaders of the Institutional Investors Group on Climate Change, the Principles for Responsible Investment and UK Sustainable Investment and Finance Association said it was in the country’s “national and economic interest” to remain a global leader on climate action. Institutional investors are ready and willing to “provide the capital necessary” for the transition to net-zero emissions and urge the government to set clear and supportive policies on emissions reductions, they wrote.
“On behalf of financial services institutions committed to promoting sustainability, we urge the incoming government to reaffirm the UK’s objective to be a global leader in tackling climate change risks,” James Alexander, chief executive officer of UK Sustainable Investment and Finance Association, said in a separate statement. “A key part of this will be maintaining ambitious climate policies and building the right regulatory environment to support this.”
Under previous prime ministers, the UK became the first major economy to pass a net-zero emissions law and made a big push as the host of COP26, the United Nations climate talks in Glasgow last year, to burnish its green credentials with a bold strategy to green the economy. Truss’ first moves as prime minister have caused some concern among climate watchers, including the appointment of an energy minister who is an avowed supporter of fossil fuels and who’s flirted with climate skepticism.
Britain and other countries are being hit hard by the energy crisis, forcing governments and investors to take stock of their public commitments to reduce emissions.
The investor letter, which is also signed by the heads of eight investment firms including Aviva plc, BT Pension Scheme Management and Federated Hermes, pitches net zero as a pro-business and pro-growth policy. The net zero transition might attract £10 billion per year of investment to the UK and create 600,000 new green jobs by 2030, they wrote.
“There are many benefits that support the case for the transition to net zero, including greater energy security and affordability, and an avoidance of the worst impacts of climate change,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change. “However, to realize these benefits will require both a significant increase in new investment from the private sector in climate solutions, such as renewables, and a shift in capital allocation to assets that support the transition.”