A European group of global investment managers and pension funds has devised an ambitious plan to cut their portfolios down to net-zero carbon. The Institutional Investors Group on Climate Change includes more than 1,200 members in 16 countries. Together, they control over $40 trillion in assets.
The group distributes its recommended measures to asset managers to help them reach the European Union’s goal to be climate-neutral by 2050. Its policies are based on a framework developed with more than 70 funds around the world.
As investors focus more on sustainability, especially since the Paris Climate Agreement, they’ve begun to pressure their asset managers to cut the carbon in their portfolios. “Countries, cities and companies around the globe are committing to achieve the goal of net-zero emissions and investors need to show similar leadership,” Stephanie Pfeifer, IIGCC’s chief executive officer, said in a statement.
IIGCC’s agenda is lengthy. A few points include analyzing the latest policy developments for members, developing policy positions, collaborating with like-minded global and European bodies, and facilitating workshops and roundtables with peers.
Decarbonizing the world’s economy is an overwhelming task. Before a slight pandemic-related blip downward, global coal demand was at an all-time high. With a projected 9.7 billion people by 2050, it will take a lot of money, education and commitment to meet the ever-increasing appetite for electricity with renewable sources.
Oil use currently averages more than 90 million barrels per day, and 70% of this is used for transportation. To reach net-zero carbon goals, these diesel- and gasoline-chugging vehicles will need to be switched out for electric vehicles charged with renewable energy sources. On the plus side, the world spends more than $5 trillion on fossil fuel subsidies, which would go a long way in funding renewable energy instead. We might also see a big drop in healthcare costs if people were no longer exposed to the detrimental effects of burning coal for fuel.
Image via Pixabay