Prince Charles to propose ‘pension plan for the planet’

Plan follows discussions with institutional investors.

Sir Nicholas Stern, author of the UK Stern Report on climate change, has given an insight into plans being prepared by HRH Prince Charles, the Prince of Wales, for a “pension plan for the planet”. Writing in the Times newspaper, Stern said the Prince of Wales had been talking to pension funds and insurance companies, who he said were the most likely investors in such a scheme. He said the discussions, which were first revealed in December 2007 by Responsible Investor, had convinced the Prince there was appetite amongst institutional investors for quality, long-term investments that could help in the fight against climate change. One idea, said Stern, to be published within the next ten days as part of the Prince’s Rainforests Project, is for an international agency to raise funds by offering 15-year rainforest bonds with competitive returns. The bonds would be guaranteed by developed nations and the interest and principal could be repaid from a share of income from future carbon markets, potentially including rainforests, by prior agreement with rainforest-nation governments. Other ideas, he said, included possible surcharges on emission-generating products or funds raised by the auction of emission permits in future carbon markets. Stern said the project would help unite investors and governments to harness private sector capital forclimate change solutions. The funding gap between the present efforts to save the rainforests and the economic benefits of deforestation, Stern said, was already around $30bn a year. In July this year, Responsible Investor revealed that the P8 group of institutional investors pulled together by Prince Charles were preparing a plan to send to global policy makers to lobby for the best possible regulatory and financial environment that would enable pension funds to start using their financial muscle as long-term investors to take stakes in companies developing sustainable energy solutions.
The P8 investors, named after the G8 group of global economic powers, collectively manage about $3 trillion in retirement money. The World Bank also recently announced that it was in discussion with a group of the world’s biggest public sector pension funds about ways to structure joint investment products that could channel billions of dollars into the fight against climate change. Stern, former World Bank chief economist and author of the high-profile report on global warming commissioned by the UK government, now works as a special adviser to HSBC, the banking group, on economic development and climate change. He serves on the steering group of Prince Charles’ Rainforests Project.