Investors

Investors urge G7 to force firms to come clean about their exposure on climate

Investors IA

A group of influential investors from the UK are urging the G7 countries to force firm to come clean about the climate exposure and their related risks; this in order to better comprehend their potentials about energy transition and how to achieve it better.

Firstly, according to a report by The Guardian, the Investment Association (IA), which represents asset managers including Legal & General, Schroders and Aviva, has a combined investment of $8,5 trillion euros under management.

Secondly, the IA sent a letter to ambassadors and high commissioners, ahead of the G7 summit in Cornwall, calling on leaders to issue a sector-by-sector guidance to help firms achieve the Paris Agreement goals; which aim at limit global warming to below 1,5 degrees Celsius.

Thirdly, G7 seven members include Canada, France, Germany, Italy, Japan, the UK and the US. The letter by the IA added that governments should coordinate and standardize climate reporting, in order to gather data.

Moreover, the recommendations from the UK investor group are part of a broader effort in the country to help their members decarbonize their investment portfolios; a task precisely complicated by the lack of data and information available.

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Investors with a vital role in energy transition

In addition, the IA considers that with more data, chiefs could add more pressure to individual companies that are failing to align their business models to a climate change agenda. Investors could also pressure companies by threating them to withdraw their money altogether.

Additionally, IA members such as Allianz Global Investors, Jupiter Asset Management; and also, M&G Investments have pledged that their portfolios’ carbon emissions will reach net zero by 2050.

On the other hand, Chris Cummings, CEO of the Investment Association, said. “The meeting of the G7 is a prime opportunity for the world’s largest economies to take a coordinated, global approach to tackling climate change.”

He also added. “As an industry which invests in companies around the world on behalf of both UK and overseas savers and investors; investment managers have a vital role to play in the shift to a more sustainable global economy.”

Finally, he concluded. “Ensuring high-quality and comparable data on the risks that companies face from climate change is key to achieving this; and meeting the net zero targets.”

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