$3 trillion P8 pensions group to kick start Asian renewable fund

Group formed by HRH Prince Charles to meet P80 Asian group to launch vehicle for meeting $10bn per annum Copenhagen targets.

The P8, a group of the world’s biggest pension funds brought together privately by HRH Prince Charles, the Prince of Wales, is to meet with a broader group of Asian partner funds known as the P80 in Seoul next month, with the aim of kick-starting private capital to contribute to the $10bn per annum initial investment into low carbon energy projects in Asia identified at December’s Copenhagen COP-15 climate summit. The P8 group is actually twelve giant pension funds collectively managing $3 trillion in assets. It includes ABP, the giant pension plan for Dutch civil servants, CalPERS and CalSTRS, the two largest US pension funds, and the Universities Superannuation Scheme in the UK. The Seoul summit on June 16 is being hosted by the P8’s newest member, the National Pensions Service of Korea, which manages over $200bn in assets. The Korean government itself has signed up to domestic green initiatives valued at about $31bn. In a keynote presentation at this week’s Clean Investor 2010 conference in London organized by Responsible Investor, Aled Jones, deputy director at the Cambridge Programme for Sustainability Leadership and facilitator for the P8 Pensions Group, said the initiative was working with the Asian Development Bank,the International Finance Corporation and the UK government to structure an investment vehicle for Asian investment: “We’ll be bringing together probably around 20-30 Asian pension funds and some of the corporate banks to talk about a big institutional response. We hope to get close to launching something at that event that looks like a fund that tests the barriers that are out there. It won’t come anywhere solving the problem but it will be a significant percentage of the $10bn that is needed this year.”
The P8 did not say whether its US and European pension fund members would be committing capital to the new fund. The Copenhagen Accord, which was not ratified at the COP-15 meeting last year, but has gathered growing support from individual countries, includes target pledges of $10bn to developing countries for low carbon investment from 2010-2012 with an aim of increasing this to $100bn per annum from 2020.
Jones said the barriers to private/institutional investment in Asian green projects included a lack of fund diversification in developing countries, as well as lack of credibility/history, insufficient scale and an uncertain policy environment, all of which, he said, will form part of the discussion in Seoul.